Market Resiliency Frustrates Bears

I admit to being a bit surprised by the continued resiliency of the market this month. I would have thought that the market was going to make a short-term top this month, and experience something of a pause that refreshed prior to Q4.

But as we know, the market can do anything at anytime, and usually moves in the direction that frustrates the largest faction of investors. So as the call for a market pullback became somewhat of the consensus view, it isn't too surprising that we didn't get one.

I think that as the market broke out into new high ground, those who had recently added to their short positions used the new highs as a level to place stop losses, such that when those levels were exceeded to the upside, it spurred an additional wave of buying.

This market is more and more reminding me of 2003, when the market continually stair-stepped higher, and never really pulled back enough to give those who were underinvested a "good" opportunity to put ample money to work. That market just continued to step higher, and force those who wanted to participate to pay up for stocks.

Moreover, the bears back then continually called for a "retest" of the March lows, but such a retest never came, and the market really powered ahead on Q4 of that year to make for the biggest yearly gain in the SPX since I think 1998.

Could the same thing happen this year? We would need to see quite a run for the SPX to achieve +25% gains for the year, but the market sure is starting to resemble that type of price action.