Greenberg: Market Doesn't Believe in Falling Knives

SAN DIEGO (TheStreet) -- The other day I tweeted that if Green Mountain (GMCR) and SolarCity (SCTY) could hold their post-earnings gains, especially if the news wasn't great, it could mark a turning point for the momentum names in this market. Both are poster children of a market gone wild.

As I write this, that's just what is happening as momentum investors, stung from the market's recent upheaval, reach for straws (or reasons to buy.)

Green Mountain beat the street, but guided earnings to below expectations. SolarCity, as I wrote in Reality Check today, used a classic diversion tactic by giving its 2015 guidance at least six months prematurely.

None of that, of course, matters. Investors who look for reasons to buy will see the glass as half full; just the opposite when they're headed for the exits.

This market's last-gasp to rise higher was summed up in a tweet today to me by somebody who wrote, in response to my SolarCity comments: "No disrespect intended but your point of view is a destroyer of wealth. Following your analysis is of little merit."

I prefer protector of wealth!

Reality: For somebody who actively trades the psychology of this or any market my analysis and reports aren't going to give them what they want (unless, of course, they see me as a counter-trading indicator. But that can be dangerous, especially as the market swings to excesses.)

I continue to believe that valuations and what goes into them ultimately matters. Certainly paying attention to the risks and issues, which have been identified, does. Or should! The smartest investors in the bunch, especially institutions who take positions for more than a day, tend to understand that.

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