I saw a string of remarks in the comments thread that were kicked off by this:
I take no offense at what Dutch said, and I know it was offered in the spirit of being helpful. I still think this would be an opportune time to try to answer the presumed question: “Yo, Tim! What’s with all the desire for a bear market? What’s your problem, man?“
I think I’d like to first answer by making clear on what are NOT the reasons:
- It’ll make me richer – just the opposite! My trading portfolio constitutes a very, very small percentage of my net worth. If the Dow Industrials collapsed to 5,000 over the next year, I assure you, my net worth would be MUCH, MUCH lower. So “wanting” a bear market, ironically, is very much against my own welfare. The higher assets go, the more I am worth. Simple as that.
- It’s based on virtue – this seems to be what is suggested above. And, again, no. It’s true that I find Powell and his lot offensive. But even if I thought shorting was The Most Goodly Thing In The World, I would be insane for that to be a reason, because………who cares?? As if my tiny portfolio would compel Powell to change his behavior. Please!
- It’ll make me popular – ummm, no. The people of earth hate bearishness. Trust me on this one. Far easier to be a permabull. Indeed, it’s effortless.
Well, I tried to be pretty plain about it late last year. On December 26th, I stated quite clearly both here and on tastytrade that the selling was over and we were hopefully in for a big rally. My target was 2600 (although, as we got closer, I changed that to 2626). Clearly my target has been busted.
My view at those levels (and at these levels) is that there are short-setups aplenty. Regrettably, thanks to Powell’s new posture, even good setups simply aren’t working.
Here’s the metaphor I offered up a few days ago: my objective is to get a fire going outside. I am inside a barn and have hay bale after hay bale, all perfectly formed and incredibly dry. Even a photograph of a match would set one of them aflame. (For those of you a little slow on metaphors, the hay bales are individual short setups).
And yet………..it’s raining outside. Indeed, it’s pouring. And it’s been pouring since December 26th. And it seemed the clouds were going to part recently, but………nope. Powell is up in an airplane “seeding” the clouds, and it’s just going to keep raining.
So, no, Dutch, I don’t beat the bearish drum because of virtue, or even because it’ll make me richer. Indeed, the only real benefit a bear market brings to me personally is that the world beats a path to my Subscription page (and God bless my subscribers!) And good for you, and others, for cashing in on this rising market. In the meanwhile, I’ll keep focusing on making Slope the best it can be.