As the VIX got pounded back into the sub-teens today, it occurred to me to compare the present activity to the period preceding the financial crisis. What I found was interesting. The chart below (click it for a much bigger version) shows 2003-2007 on the top and recent history on the bottom. You may notice a lot of similarities between the top and bottom, and I’ve drawn a red line at the top showing the equivalent of “right now”.
It’s a pretty quiet morning, except for the 3,893th rumor about some kind of OPEC agreement (which, again, was dismissed). Glancing at small cap equities, it’s startling how swiftly they undid the damage from two Fridays ago (tinted below):
I am constantly picking on Pier One here on Slope (here’s a specific one), and with good reason – – I think it’s heading for another collapse, just like it did during the financial crisis (when scented candles and useless imported trinkets fell out of favor). I think we’ve got a long way to go still.
OK, I’ll say it: this market is officially pissing me off. I know, I know. “Trade what you see before you.” I won’t comment on that advice. I’ll simply point out the following very simple facts:
The Internet bubble that peaked in early 2000 was clean and simple. The break happened, it retraced, and it fell for years afterward:
Allow me to start off by sharing a comment posted on ZeroHedge this afternoon which must be the greatest comment ever made over there. It’s a lot of text, I know, but it’s spot-on.