I’m often surprised when people ask me where the strange name for this website came from. It is, of course, from the old adage that “markets climb a wall of worry and slide down a slope of hope.” Allow me to acquaint you with the latter, which is from the wee hours of this morning.
See, people seem to think that since we’ve had a rough four weeks, then:
- The market is safe again;
- We can all go back to normal;
- The market can return to its daily record-making highs and 18 year olds can smirk and say “stonks only go up!” and “BTFD!”
None of this is true. The bull market peaked on February 20th, and we’re in for a couple of years of this. You’re not going to see the S&P at the peak again for years. The market won’t be attractively priced until the S&P reaches 1250. The BTFD crowd is going to grind their Robinhood accounts into hamburger.
There will certainly be counter-trend rallies along the way, of course, including fierce ones like yesterday, which I described as “Chapter One”. What would be needed for “Chapter Two” to take place would be a clear push above 2500, which wouldn’t take too much.
Today should be interesting, of course, since every dimwit with a laptop has heard the truism to “sell the news“, and the biggest “news” is the $6 trillion corporate bailout boondoggle that the pinheads in D.C. are going to pass.
Yet I must emphasize the damage has been acute. Take note of the broken trendline on the /ES below. I would also ask you to glance at the entirety of the September/October 2008 mayhem – – that tiny blotch tinted in green – – compared to what we’ve just endured. And I say again, this ain’t over. Two years of this is coming (let me stress I am far more confident of the target, 1250, than the time……….which is frankly pretty irrelevant).
On a different topic, gold certainly seems to be done with its raging rally toward the triple top at 1700. We’ve already commenced the rollover process.
As for my own portfolio, I am just “marking time” until next Tuesday when the quarter ends. I’m just putting the finishing touches and flourishes on my quarterly profits, but with hardly any trading or any serious commitment. I was twelve times more exposed in mid-February than I am now, and frankly the positions I am in have more to do with fighting boredom than slashing bull throats.
I can’t strap on my swashbuckling outfit until we’re mindlessly whistling and chatting about how great life is. It’s going to take some time for this terror to burn off. After it does, we can once again ride down………..the slope of hope.