Doubling Down at Barron's

So glad we've almost made it
So sad they had to fade it
--Tears for Fears

Barron's is doubling down on its recent contribution to the cover story indicator phenomenon with a new cover suggesting that Dow 16,000 is within our grasp (the Dow currently trades at ~14,500).

The most recent Barron's Big Money Poll found 74% of money managers identifying themselves as bullish or very bullish, a record for the poll that dates back more than 20 yrs. These findings are consistent with my reading on sentiment among professionals at the RISE conference a few weeks back.

John Hussman demonstrates the contrarian nature of cover indicator, with major market prognostications glancing Barron's cover near major market tops.

Dr J also suggests that the resolution to this will be a broad 'forced liquidation,' as leveraged market participants sell indiscriminantly when prices move against them, resulting in a cascade lower. He suggests that the action in gold last week is a harbinger for what awaits the broader market (something we have mused about as well).

Deflationary, should it occur...

position in SPX