It is very difficult to get a big correction in equities
when they are this cheap. If we were looking at a P/E of 16-17 for the S&P500, then I would be more concerned. We are not even close to that level. There is just as much of a chance for the cliff to end reasonably well as there is for it to end badly......I can understand a little profit taking but to short with duration in front of the cliff at these prices? Really? At 1425-1450 in the Es and you want to roll the dice...fine....not after we've come in 8-12% in the indexes already.
where are the excesses? And hasn't the market already stayed cheap enough to account for that? Look at valuations here and tell me otherwise. Housing now recovering, China data looking much better, Japan about to stimulate, Greece on the verge of getting more money....If there's anything reasonable with the Pres./Congress, I just don't see us staying down here.
I don't know about a surge, I see 5-6% in 3 weeks time. By mid-Dec. congress better have a plan on the table or the rally will fade. A credible plan will keep us slogging upwards well into Jan. 2013 but by then we better be void of corporate warnings for the Q4 period.