Will King Dollar break the S&P?

We keep asking ourselves who is buying into a market at an all time high; the answer is always the same.  It is scared money; the bears are likely playing a bigger part in this rally than the bulls are.

Remember, prices changes are largely based on motivation not necessarily the quantity of buyers and sellers. Traders jump on the bearish bandwagon on every little pullback in the S&P, but they've been burned so badly this year that they aren't willing to risk much. As the market starts to creep higher, they panic and buy back positions without regard to price (in other words, the bears become highly motivated buyers bidding prices up).

On the other hand, because this is one of the most "hated" rallies of all time; money managers are scrambling to get sidelined cash into the market.  These traders are panicking to get in the market and are willing to buy shares at lofty prices because they feel like they can't afford to wait for the dip that never seems to come.

We don't know how long this frenzy will last, but we do know that scared money rallies and performance chasing rarely ends well.

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