Dave  Moenning
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Stocks have been down five days in a row. 'Sell in May and go away' is working yet again. The news out of Europe just seems to get worse with each passing day. (Does Germany's high court seriously need 3 months to decide whether the ESM is legal? After all, the ESM has been being kicked around for like 15 straight summits.) China's economy is slowing (but of course, the degree of the slowdown is subject to debate). India is a problem. The U.S. economy is slowing too. And in turn, earnings are projected to start slowing (as in next week). Bond yields in Germany and the U.S. are at or near all-time lows. Oil is confirming the slowing growth theme. All of which provides the bears ample reason to be licking their chops right now.

To be sure, the sentiment toward the global macro outlook is dour and fear is in the air. Nouriel Roubini is out with a new forecast suggesting the sky will actually fall this time around. Even Meredith Whitney is starting to look right as a new city seems to go bankrupt on a weekly basis. And as if the economic news flow wasn't enough, each new financial scandal (MF Global, Li(e)bor, PFG, and word that BLS stats may have leaked out after all) seems to support the idea that the stock market is no place for women and children (or old men) these days. As a result, the bears continue to suggest that the light at the end of the tunnel is indeed an oncoming train.

But here's a question or three worthy of at least a moment's consideration. With all the bad news, the scandals, the crises, and the HFT-driven market volatility, why then is the S&P 500 (SPY) just 5.5% from it high water mark for this bull market cycle? If the sky is really falling, why aren't stocks lower? Why is the S&P's weekly chart still in an uptrend? And why has the last hour of the trading day been up in nine of the last ten sessions?

The true-believers in the bull camp (and I most certainly cannot count myself as a member of this club) suggest that the bad news is priced in. They tell us that valuations are pretty enticing, that interest rates are low, and that inflation is nowhere in sight. Those wearing the rose-colored Revo's also remind us that corporate earnings are at record highs. Oh, and then there's the "hopium" thing.

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Dave Moenning

David Moenning is the President and Chief Investment Strategist for Heritage Capital Management, a Chicago based SEC Registered Investment Advisory firm which he founded in 1989. You can follow Dave at .