Securities Research Services

Thursday, October 25, 2007

What a Wall of Worry Looks Like

Volatility has been heavy over the past few weeks and yesterday didn't disappoint. Early weakness on Merrill Lynch's earnings, however, gave way to buying in the afternoon keeping a strong bullish bias alive.

Moreover, the Walker sentiment report came out last night and we find that the overtly bearish sentiment that was reported last week persists this week.

This is a market that it has paid to pay attention to sentiment with. Everyone hates this rally and hated rallies tend to keep on burning the bears and working their way up the wall of worry.

All the news is negative. Sentiment is negative. Analysts are grudgingly going along with the rally, but complain about impending recessions and poor earnings. And the market takes two steps forward and one step back and another two steps forward again.

This, folks, is a wall of worry.

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