Cough CLICK! Cough. Thanks.
Well, this is a market that has gone from free-falling (August, September) to unbreakable (October 2nd to the present). If there is good news, the market vaults skyward. If there is bad news, the market might be soft for a few hours, but then it will either dismiss the news or assess it through a more positive lens. The market wants to go up, and it is doing so.
The title of this post is "Beaten" not because I am in such a state – – hope springs eternal in the bearish breast! – – but because this market has made a lot of progress beating the bear out of me. That is a dangerous thing, because the market likewise did a sensational job torturing the bear out of me for the entire year through July, which resulted in capturing only a fraction of the long-awaited drop we enjoyed all-too-briefly this summer.
I also sense the bear in me is beaten up because I've been participating on the long side much more than I have in the past. I have been cheerfully buying stocks that would normally make me wretch, including the likes of – God help me – Bank of America. My greatest success lately is with junk like MTG which enjoyed back-to-back double-percentage-point gains the past couple of trading sessions.
Although I am a chartist, and not a news analyst, I must say that the market's explosive move higher over the past five weeks is based on the most dubious of "good news". When we've reached a point where the market jolts higher over things like new bailout packages and prime minister resignations, it's all become a pretty sad state of affairs. I cannot help but think of Michael Burry (who made a huge fortune shorting the real estate bubble four years ago) screaming obscenties in 2007 as the market refused to break. I feel the same way; I'm getting really, really sick of waiting.
Just to add salt to the wound, lately I've been dealing with having a respectable profit in the middle of the day only to see it get completely trampled by some new jolt of surprise news. The latest was, of course, Silvio Berlusconi, whose pledge to resign put super-chargers on both the Euro and ES. It is, to say the least, frustrating. My long positions, at least, take away some of the sting.
It's all about the Euro, of course, It's said we are all Keynesians now. That isn't true. We're all FOREX traders now. In 2008, we topped, diddled around a horizontal line, then finally fell. At present, we dropped (beneath a much heftier pattern) and are currently in "diddle" mode, which is kinda like torture.
The more exotic NZD/USD tells a similar story. We cannot party until currencies fall apart. Period. End of story.
Energy has been alarmingly strong. The last line of defense on crude oil is that broken trendline (which, funny enough, lines up with the psychologically-important $100 level).
The ES had its "kiss of death" with its broken trendline but, curses upon curses, the market has found the strength and resolve, bless its heart, to assert its way toward that line again. If we cross it, things go from messy to ungodly messy.
You can probably detect my exasperation, since you needn't read between the lines to get it. But what can we do? Take things one chart at a time and one day at a time. The big picture still tells me that, politics or no politics, things will eventually break. I only hope my sanity remains intact once that joyous day arrives. I'm starting to wonder if it ever will.
