Today, the market is looking to pull back. The market has been on a nice run lately, and I would look for some profit taking today. If you remember last year, I harped on the fact that the market was becoming used to huge, wild swings of 2-3% or more a day. Well, lately volatility has declined and we have enjoyed a nice, steady rise. In fact, so far in 2012, there's only been one day of a decline of 0.5% or more and we haven't had a decline of 1% or more since late December. However, the news out of Europe and Greece is gloom and doom, as the European finance minister is basically saying there should be no Greek bailout, and it appears that other Euro countries are looking to push Greece out of the Euro.
The other point I would like to make about this rally we have enjoyed, is that too many investors have become bullish. Stocks, like McDonald's, are hitting their multi-year highs, even though we are in a sub 3% GDP environment. Furthermore, this is all happening while volume has been significantly lower than historical norms.
But, to leave on a positive note, courtesy of Sam Stovall, from S&P, when stocks are in the "black" in January (note the S&P was up 4.4%), then 86% of the time since 1945, the market has been in the black for that year.
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