John Hussman, in his latest article, said that the stock market bears are capitulating everywhere.
The bears are gone, extinct, vanished. Among the ones remaining, many are people whom even I would consider to be either permabears or nut-cases...
And capitulation is everywhere. CNBC ran a story last week “Bears on the Brink: I Can’t Fight It Anymore.” Even the normally staid Alan Abelson of Barron’s finally threw in the towel last week, abandoning his own caution that stocks have run too fast, too far...
Ironically, the CNBC story itself showed skepticism over whether the market rally is sustainable.
Still, any one of those substantial market headwinds could start blowing again on a moment's notice, worrying some that the current rally is heading for trouble...
“We are reaching capitulation levels,” said Walter Zimmerman, senior technical analyst at United-ICAP. “What troubles me is there's never been a happy ending from that combination of extreme complacency.”
Indeed, many of the metrics that gauge market sentiment are in startling territory.
And in reporting from Davos last week, Peter Coy at Businessweek said:
The hive mind of Davos has concluded that the financial crisis is done, finished. The new worry: a bubble in the credit markets.
So while there has indeed been a rise in optimism among investors and analysts, doubts over the sustainability of the current rally have not vanished.