Bounces Are NOT Bases

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About a week ago, I was thinking to myself, “Tim, ol’ boy, you’ll be able to load up on cheap stocks and ride this bull higher! It’ll be like March 2009 was dropped into your lap!” I was genuinely excited about the prospect of having as much fun with bullish charts as bearish charts.

Since that time, having surveyed literally thousands of charts, I’m here to tell ya something: there are precious few honest-to-goodness attractive bullish charts out there. One of the handful, as I’ve mentioned, is BLDP:

But, on the whole, all these briefly-cheap stocks have been experienced nothing more than opportunistic buying that I believe will burn out with surprising alacrity.

Take Boeing, for instance. I made mention of this both here and on my live broadcast as a bounce opportunity, and bounce it did, nearly throwing off a 100% profit in a couple of days. (Indeed, I got some flack for this, with one chap taking the time to email me about how it wasn’t good to suggest buying the stock of such an immoral company). Suffice it to say, the chart below is not the stuff of which long-term gains are made. It’s a bounce, and a bounce that will probably relax swiftly.

We are truly living in a topsy-turvy world. The triad of Politics, Biology, and Finance have coalesced into a veritable Tigris & Euphrates of unpredictable madness. The much-anticipated jobless claims number came out just before I wrote this post. Until recently, this is the sort of weekly data point that would conjure up yawns and stretches. This morning, however, the world was on the edge of its seat, and with good reason.

Freakishly, of course, the ES soared 70 points off of its prior price (!!!) on this dreadful news. What does the market expect? Another $6 trillion package in a few days?

So catastrophic was this data point that the notion of unemployment going from record lows to a ten-fold jump seem nearly inevitable.

As I’ve pointed out repeatedly, though, bull markets die on good news. It was only about six weeks ago that surveys revealed that Americans have never been more content and optimistic. This, coupled with the can’t-get-much-lower unemployment rate, convinced me that the end was truly near. And now it has arrived. This isn’t a pause in the bull market. It’s a new thing altogether that’s going to be with us for quite some time.

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