Is this market gone crazy or is it just me?
The market isn't going crazy at all really. If you look at the trading band of the highs and lows of the S&P during the bull market that started in 2003 – 2006, you'll see in March, August and October of this year it started getting way too far ahead of the top band. It's been obvious it was going to correct for some reason, which the profit takers and bears ("The Shorts") wait for. The MACD was normally running under 20, in 2007 it's been up over 20 and only now is it back under 20. Typically you can use the 50DMA which has just been broken, but that's less relevant because that has been inflated this year as well. The high range is 1480 and the low range is 1380, if we stabilize in that range and start resuming the upward trend again we should do fine.
Even bearish analysts now are expecting a bounce because the selling has been overdone. Everyone agrees we're in high volatility mode right now, but over the course of a few months I expect we'll start ramping again. Nothing fundamentally has changed really. There was some over exhuberance from Cisco prior and Financials coming out with unforecasted writedowns, but they are only worthy of the correction we're in right now. Next year is a presidential election year, typically positive, global growth fundamentals are still in tact.
Anything else are just boatrockers, but these could capsize the above into recession: Oil to 150 range vs 100 range; turbulence with Iran breaking out into something bad; 2 to 3 more credit crunch significant surprises; US$ manipulation by Chinese……