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.
Things are seldom what they seem,
Skim milk masquerades as cream;
Highlows pass as patent leathers;
Jackdaws strut in peacock’s feathers. – H.M.S. Pinafore
It turns out the Brexit was just about the worst thing that could have happened to the bears. On the night it happened, I was ecstatic. I thought, finally, “this is it” – – a real turning point. Nope! The bounce emboldened the bulls, and they have been slicing bear throats ever since.
Virtually every day has brought more disappointment. My “tripod” of 2016 – BULLISH bonds, BULLISH precious metals, BEARISH equities – has been pretty much “2 out of 3” all year. Bonds are at lifetime highs, gold and silver are strong, but equities………curse them…….keep lurching to levels never before seen in human history.
First off, I must complain mightily to the market gods: Kuroda disappointed the market. The USD/JPY is collapsing. It wasn’t that long ago this would have meant a huge selloff in equities. How about today? Well, we got a little weakness at first, but now – – nope. ES green. TF green. NQ green. Tim’s stomach……green. Nothing is bringing this market lower. Nothing.
I lightened up swiftly on energy shorts this morning, because even though crude was down about a full percentage point (yet again), it tagged its Fibonacci retracement, so I figured it was time to scurry away.
Bonus Image: the pure, sinless future head of the world (which is what last night’s pure white pantsuit was all about). (more…)
If I was completely dependent on the market for my mental health, I would have made myself into a six foot tall Christmas ornament hanging from a coniferous tree long, long ago. To be sure, the market influences my disposition: I’m about fifty times happier than normal (a very tiny starting figure, certainly) when the market is getting killed. Over the past seven years, this has happened approximately never. Indeed, even the most recent history of the market looks like the chart below: it is either (a) going up quickly, or (b) it’s going up slowly. This is what markets look like when the VIX is approaching single digits, people.
I think the two-word phrase that captures 2016 for the bears is: “disappointingly brief.” Disappointing because all attempts to drive the market lower are aborted. Brief because the attempts to do so often last only a day, or a tiny bit more. 2009-2016 has been awful for the bears, but 2016 has simply been awful in a different way.
Let’s take a look at how the bulls seems to have finally clinched real power: first, the Dow Jones Composite has had its channel violated. Before we all kill ourselves, I just want to point out that this same channel was violated to the downside briefly (see both tinted areas), so it’s not a totally lost cause.