up up and away

its quite scary to see how the index can soar up and up without stopping. at this juncture, i like to stay out and analyse the insanity that is going on. market psychology.

for the index to soar so high up, it must be that the listed companies are doing very well. probably having large cash flows and steadily increasing profits. or maybe securing future contracts that will attribute to future growth. however, i don't really think it is the case as of now. another reason would be over speculation, as i have mentioned before, taking the market for a wild ride.

at this moment, there are alot of buyers. investor confidence comes in and so does the buying. if there are so many buyers, who sells them? company can sell their shares that they may have bought back, making a profit on them and further driving the market up. short term traders holding positions for 3 days to a week may provide some liquidity for the buyers. all it needs is for the demand to get exhausted and the market will top.

but we can't really time that, so we just have to observe the market psychology for the time being. people are buying, so when will the buying stop. i know i'm being bearish on my viewpoint, but i feel that there might be some bumps along the way.