What if Europe is actually really going to get aggressive?
What if housing has bottomed and is starting to improve?
What if the Q2 jobs data was affected by adjustments as much as Q1 and the economy wasn’t as bad as some feared?
What if Chinese stimulus works?
What if earnings rebound in Q4?
“What if” is a close relative of “Green Shoots”. The market doesn’t need actual data to support it, just needs to think it might be coming. There are a lot of shorts who are nervous about this week’s price action. We didn’t get the typical Monday pullback. Here it is Thursday and we continue to push up against the highs. That is making people question their beliefs, and wonder “what if”. And it isn’t just the bears. Many bulls are underweight and are wondering “what if” this is the real thing.
For myself, I still think 1,425 is a good target, but above 1,410 I start selling again. I think the “what if” analysis is what will push us to those targets.