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“Everybody is looking for some type of pullback.” -Timothy M. Ghriskey, Feb. 24, 2013 in the New York Times

What if it’s more than a “pullback”? If everybody is looking for a pullback the odds are we won’t get one. I’ve said it a million times: ‘all the people can’t be right all of the time’ (actually Lincoln said it and Bob Dylan refashioned it).

So what are the other options? Well, the market can keep going up. Or else we get something more than a mere pullback. The market is already pretty overbought so the probability that it will just keep going up for the next few months is not great. It’s possible but it’s not a risk I’m willing to put any money on. Still, I won’t bet against it, either.

The nature of the term “pullback” suggests something less than an event that would really induce fear. “Pullback” suggests a rest for prices that gives folks the chance to hop on the train to easy stock market profits. Sound familiar? No? Well, that’s because there is no such thing. The problem with a pullback that makes everyone feel comfortable with buying is that it doesn’t turn out to be a great buying opportunity. It usually turns out to be a false pullback that suckers money in from overeager buyers before falling even harder.

Good buying opportunities are those that create enough fear to significantly diminish demand. And Ghriskey’s “pullback” doesn’t sound like that sort of opportunity. The crowd, aka “everybody,” doesn’t have the stomach to buy when fear is peaking. So to get to that level of fear we probably need to see more than just your average pullback.