Is 5% the New 1%?

Judging from the overwhelming optimism it’s time to buy!

  • AAPL is going parabolic and is now worth more than Poland (Apple has 2 products)!
  • Europe is safely contained thanks to the ECB’s LTRO.
  • It’s an election year and with oil prices are at a near all time high – Mr. Obama will likely tone down the war mongering.
  • VIX is relatively low.
  • Renewed confidence in the EUR.USD

But here’s what reassures cynics and contrarians:

  • A recession in Europe will impact the US growth prospects to a greater degree than presumed. Ford isĀ projecting a loss of $600M.
  • Commodity Markets are jittery. GC_F and SI_F fell off their chairs yesterday.
  • IPhones and IPads do not represent a solid market foundation, $AAPL does not create jobs, in fact their Jobs has moved on to better things (hopefully).
  • Housing and Employment. 54% employed 18-24?
  • And my favorite: Even with a 5% correction in the $SPY we’ll still be in a bull market, that leaves a good reversion to the mean.

One thing I’ve learned from losing money is to avoid betting against the trend or calling the top/bottom. That’s a fools game and you’ll be stopped out quickly. On the other hand, now is the perfect time to buy some protection for expiration on the April, May and January time horizons.

The levels that I’m watching on the $SPY are:

  • 138.22
  • 136.63
  • 135.80
  • 134.25
  • 133.72
  • 131.50