As I mentioned, this morning the consensus among Slopers was that we were going to rage higher all day long, and 4100 was a foregone conclusion.
This was a totally and completely understandable speculation.
As I am typing these words, although everything is still green, the entire “bump” this morning has been destroyed, and who knows, we might even close red. Let’s hope so. I love seeing disappointed bulls.
But here’s the point I wanted to make.
Take a look at the semiconductor index fund (SMH) below. Take note how it has burst above its trendline. Resistance has been broken, right? The bear market is over, correct? You should go long semiconductors, yes?
Not so fast.
Here is the exact same chart, except with the past few months erased. Let’s put our heads back in August 15th. The SMH was broken then, too. And one might have reached the same simplistic conclusion. BUY SMH!
In point of fact, the SMH LOST ONE-THIRD OF ITS VALUE WITHIN WEEKS of this “bullish breakout.”
The bear market isn’t over. It has a very long way to go. And we’re not going to believe what the world looks like when it’s finally finished.
The problem is that 99.999999999% of the planet is going to be fighting us every goddamned step of the way. But we will get there.
