Set-Up To Climb A Wall of Worry

I think an argument can be made that the market could be positioning itself to climb the proverbial "wall of worry."

We've come through the crisis and there is a palpable sense of relief that the worst is over, which is translating into a growing optimism.

That having been said, you don't climb the wall of worry by "getting happy." You climb the wall of worry by having the market move upward on negative news. We saw two examples of that today - the ADP Employment Report and mortgage applications.

Perhaps the strongest thing going for the "wall of worry" thesis is the idea that many market participants are still recovering from the psychological and wealth battering they took from the 60% market drawdown.

The disbelief and skepticism that all could be better again so soon, will increasingly draw these folks back into the market if it continues to climb. Stay tuned.