When Europe goes down, we go down almost as hard. When it goes up, we go up almost as hard.
Should be symmetrical. When I look at what's happening today, I recognize that we have still one more set of numbers that are wildly more positive than people expected.
Just this morning, Goldman Sachs (GS), Comerica (CMA), U.S. Bancorp (USB) and Coca-Cola (KO) reported terrific numbers. The latter is multiple-stretched yet still going higher, and the former are cheap as all get-out but have been held hostage to Europe.
So why aren't we up more than Europe? A couple of reasons. The short interest over there is out of control. It's been such a fabulous bet between the currency and the common that who can resist? Second, I think that there are lots of people who find the valuations of outfits like Santander (STD) reflecting almost bankruptcy.
Third, many of their markets have been hammered. We haven't been.
Now, let me give you the flipside. Our earnings have been nothing short of spectacular so far. Certainly better than expected. We are coming out of a recession. They may be going into one. Our Federal Reserve is much more supportive of equity prices than their central banks. And as far as I am concerned, their banks are all in need of more capital. Ours are done raising capital.
So what else could be keeping us back?
Here's a wild one: the charts. Our charts are hanging by a thread. We've become so chart-oriented that people are afraid to buck them. Until we go well over these various moving averages, like the 50-day, I think people will be skittish. Until then, I think the buys are here.
But I feel very alone among writers and commentators, even as the market seems to believe that I am right.