I think the two-word phrase that captures 2016 for the bears is: “disappointingly brief.” Disappointing because all attempts to drive the market lower are aborted. Brief because the attempts to do so often last only a day, or a tiny bit more. 2009-2016 has been awful for the bears, but 2016 has simply been awful in a different way.
Let’s take a look at how the bulls seems to have finally clinched real power: first, the Dow Jones Composite has had its channel violated. Before we all kill ourselves, I just want to point out that this same channel was violated to the downside briefly (see both tinted areas), so it’s not a totally lost cause.
Similarly, the S&P 100 ($OEX) has pushed above its trendline, which is a real shame, because, my Lord, this was (past tense) a fantastic, and huge, topping pattern.
And then, as widely reported, the S&P 500 reached its highest close in the history of the universe, with absolutely nothing holding it back from breaking out Monday to new lifetime highs:
At this point, the bears have only a couple of hopes.
One is earnings. Of course, in quarters past, “good enough” earnings seem adequate. It’s been nearly a decade since earnings have been genuinely disappointing to anyone. But we are entering the thick of earnings season in the coming weeks (of course, this could just as easily supercharge the bull market if companies appear to be strengthening).
Second is, as I’ve pointed out to the catcalls and egg-throwing of readers here, crude oil which could, at a minimum, create terrific short profits in the energy sector.
So for the week, Tuesday was fantastic, whereas Wednesday and Thursday were both “meh, hey, it’ll work out OK” days. Friday, however, was a heartbreaker, and judging from the cavalcade of emails and tweets I received, a lot of other folks were beaten up as well, spirits broken, hopes smashed.
But here’s my keeping-things-in-perspective moment. During my trip to Dallas, I watched the video of Alton Sterling being shot in the chest by police. Now, to be clear, I do not normally look at gruesome videos. In fact, I avoid them. But, perhaps because my home town is Baton Rouge, I felt compelled to watch it, so I did. And, having done so, I was extremely unsettled. I have never seen a video of anyone being killed before, and I was deeply affected by it. Among other emotions, it made me terribly sad. i know that’s a weak word, but it’s the truth.
On the heels of that, my family and I departed the Omni Hotel in downtown Dallas on Thursday evening. As we were waiting in the heat of the late afternoon, I noticed a helicopter positioned a few blocks away, high above the skyscrapers, standing perfectly still. I was kind of mesmerized by it, because it seemed to be painted in the sky. It didn’t seem to move a centimeter in any direction, and it remained there for as long as I watched it.
I asked the bellman if he knew what the chopper was doing, and he didn’t know. Then I saw another helicopter go to that area. And then another. Our car picked us up, and we were on our way. Not until we were settled at the airport did I see the news broadcast about the shooting.
It’s a little unnerving knowing that a sniper was killing people so close to where we were standing, and at about the same time. Making it creepier still, when we drove away, we were literally on the same road as where JFK was shot, at precisely the same spot, and we went beneath that overpass that you’ve seen if you’ve ever watched footage of the shooting. So snipers and death were very thematic that day.
So while here I am griping about a stupid bear market that will probably not appear in our lifetimes, I at least am trying to keep a bit of perspective that my family is healthy and safe, even though fate placed us so close to harm’s way. I’m a lucky man. For now, at least.
