Friday, January 3, 2014

Bubble Mentality In Full Frontal Today

China's PMI data overnight was weak. This from Reuters:

But after an initial sell-off, traders in Europe, supported this morning by traders in the US, shrugged off that news and are now reflexively manifesting a "buy the dip" mentality and pushing the bubble back up again. It is noteworthy how short-term the bad news impacted the market, and how quickly it went back up.

In a maturing bubble, down days become more and more rare. Yesterday's "first day of the year" sell-off was just a one-day quirk. I expect the bubble to continue to build.