Pollyanna was the character in a 1913 novel by Eleanor H. Porter that saw the good side of every situation presented to her. Optimism is far superior to wallowing in never ending pessimism; however, it can go too far at times. When this ultra-optimism reaches crazy levels, the one employing this outlook is said to be a Pollyanna.
Used as a noun, a Pollyanna is an excessively or blindly optimistic person. As an adjective, Pollyannaish is unreasonably or illogically optimistic.
When one thinks of today’s market action, buyers could certainly be labeled a Pollyanna as they collectively acted Pollyannaish. From the Dow’s low to its close, it moved up over 100 points despite the following news…
Used as a noun, a Pollyanna is an excessively or blindly optimistic person. As an adjective, Pollyannaish is unreasonably or illogically optimistic.
When one thinks of today’s market action, buyers could certainly be labeled a Pollyanna as they collectively acted Pollyannaish. From the Dow’s low to its close, it moved up over 100 points despite the following news…
- This morning’s housing data completed the trifecta of ghastly housing news. Monday and Tuesday gave us terrible existing home sales and FHFA price data, but Wednesday’s new home sales data wins the (trifecta) bet: it set a record for the worst ever recorded! Housing is clearly in a double dip swoon but Pollyanna ignored it, choosing to believe “It’s so bad, it couldn’t possibly get worse.” Uh-huh, I have heard that for well over a year now and yet the data continues to get shoddier.
- The unrest in Bahrain continues and Iran may get involved.
- The government of Yemen is about to fall.
- A new conflict between Israel and Palestine has begun. From the Miami Herald online “One woman was killed and more than 25 people were injured when a bomb exploded at a bus stop in west Jerusalem on Wednesday afternoon, shaking Israelis already unsettled by stepped-up Palestinian rocket attacks from Gaza.”
- There is far more news than numbers 2, 3, and 4 above but the point is - it continues to spread. Pollyanna continues to ignore it all.
- Oil traded over $106/bbl today. Pollyanna used to say that oil over $60 per barrel was very bad and that was when GDP was 4% or better and unemployment was near 4%. Now with GDP completely driven by deficit spending and real unemployment at 16%, Pollyanna has raised the “concern level” to $115/bbl, so there is nothing to worry about now.
- Irish CDS levels are rising and yields on its debt are reached record highs. Ireland will default on its so-called rescue package that, incidentally, rescues UK, German, and US banks, while screwing the Irish people.
- Portuguese debt yields are also skyrocketing, which is causing a very real governmental crisis. Pollyanna ignored it. After the close, the government of Portugal collapsed. Pollyanna says “No problemo – the EU will print more Euros and buy up its debt, Bernanke-style.”
We love a good bullish trend at Trading Advantage, but at this point the Pollyanna crowd seems to be too Pollyannaish. Indeed, sentiment seems to be illogically optimistic at this point.
Then again, there is always Zimbabwe-Ben Bernanke on the other side of the argument who is more than willing to print as much money as it takes to make guys like me also ignore all warning signs.
Trade Date: 3/23/11
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