Signs of bullishness are everywhere this morning:
1) The S&P 500 is having its best December since 1991 (up 6 percent, well above the average December gain of 1.8 percent)
2) The Investors Intelligence poll of newsletter writers showed bullishness at its highest level since Oct. 2007
3) The CBOE Volatility Index (VIX), a measure of the cost of buying protection, is near a multiyear low
4) Stocks priced for perfection. In the past twenty-four hours, both Nike and CarMax have seen notable drops in their stock prices after they reported earnings. While traders pointed to slight disappointments in each (gross profit per car for KMX, future orders for NKE), the bottom line is that momentum traders pile in...and out...of stocks when they are at these levels (both were at historic highs).
Bottom line: very high levels of complacency.
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