Narwhal Capital Management

It is a common Wall Street saying that bull markets climb a wall of worry.

If everyone is bearish, pessimistic, and they are out of stocks and/or at reduced tactical allocations relative to stocks due to all the bad news and their worries, who is left to sell?

Perhaps this is the reason why bull markets climb a wall of worry.

The Iraq War is over/ending.  Obama says all troops to be home for the holidays.  Let me say to all the service members, “Thank you for your sacrifice.  We couldn’t be what we are today without men and women like you.”

http://news.yahoo.com/iraq-war-over-us-troops-coming-home-obama-212231415.html

I always think it is fascinating to analyze the market and then watch the TV and listen to non-financial people to see what they are talking about.

It seems most people these days are talking about Europe, politics, and Occupy Wall Street.  But what is being over-looked?  Perhaps:

The fact that bank debt is at an all-time low ( http://www.cnbc.com/id/45466176 ).

The fact that consumer confidence just jumped the most in eight years (http://www.bloomberg.com/news/2011-11-29/u-s-consumer-confidence-rises-by-most-since-april-03-amid-holiday-season.html).

The fact S&P 500 earnings are at an all-time high (http://www.bloomberg.com/news/2011-11-08/u-s-stocks-may-surge-to-catch-up-with-profits-chart-of-the-day.html).

For sure, we need to watch Europe and we need to be aware of all the risks.  But we also need to be aware that some pretty darn good things are taking shape as well.  Does this make sell-offs buying opportunities?  Hmmm…

Valuations on the stock market look pretty solid, especially in light of the other available investment options.  Particularly bonds.

Just like the Bill Murray movie “Groundhog Day”, we seem to be living the same day/cycle over and over and over again.

I mentioned the market was in a trading range on 8/12/2011…we are still stuck in that range.  Bouncing off the low and falling from the high.

I mentioned on 9/1/2011 that earnings were good and should be good for quite some time, but that the real issue was a crisis on the political front that centered on lack of leadership.  Well, earnings this earnings season have been great.  BUT, the market is set to sell off this morning (after a great run up in October) because the political leaders in the EU are backing out of a deal they struck just a few days ago.

This is exactly what I mean by the political crisis.  Business leaders and market participants need a firm framework upon which they can run their operations.  This here today, gone tomorrow concerning political plans/ideas is not the way to set down this framework.  Until this ceases, strap in for volatile markets and trade/invest appropriately.