Well, it seems we've come full circle.
The agony of mid-2007 was that the really dumb folks made money and the smart ones got killed (which sort of makes you wonder really who's smart and who's dumb). But the more rational, thoughtful, and analytical you were, the more likely it was that the market would keep smacking you in the face. And the more sheep-like, ignorant, and unskilled you were, the more likely it was that the market was your ATM.
The big drop in the markets changed all of that, and for a time, it was really marvelous. But as we continue to push up, week after week, whatever lessons might have been learned from the carnage of the fall have been conveniently forgotten. It's feeling lonelier and lonelier as a bear, which in its own way is kind of comforting. It was a little bizarre for everyone to be a "contrarian".
But the entire vibe I'm picking up from the trading community is really something to behold. I just saw this over on TBTSNBN:
So there we have, in a one-two punch, (a) the ability to assign blame for one's own problems as a trader to someone else (misspelled name notwithstanding); and (b) the rapid proclamation by someone else that they've got all the answers. It's sort of like the return of beanie.
Even our friends at Elliott Wave have thrown their hands up:
What's bothersome about this kind of thing is, I suppose, what bothers a lot of people about Elliott Wave Analysis, which is……….any given interpretation always had an opposite alternate, and if things don't go your way, then you just switch to the alternate without appearing to have really changed horses midstream. In other words, I Am Right Until I Am Wrong. So the ending diagonal which has had everyone (including me) all atwitter is now simply a mistake.
I've been beating the S&P 1,050 drum pretty much since drums were invented, but I am shocked, baffled, surprised, and slack-jawed that it's getting there without one stinking pause. Not one. It just keeps going up.
I will note that today's high was just a hair below the Fibonacci retracement, which is the latest flimsy barrier the bears have erected (this one made up of wet toilet paper and a couple of twigs that were found laying on the ground). It would take a good sneeze to blow it down.
So here's where my own portfolios stand, in order of awfulness:
- Personal – this is my wild-eyed bear one, which is all puts. It's down 15% so far this year, and it's loaded to the gills with puts on momentum stocks which all look like hockey sticks. This thing would double in two days is we had an honest-to-goodness October-style fall, but that's not going to happen anytime soon.
- Schwab – OK, that's not a very good name for it, but that's where the account lives. Anyway, this one consists of a smattering of short equity positions, but is basically my Long Energy and Long Commodities one. Its core position is DBC, which all by itself is bigger than all the other positions in the account. It had a good, strong day today, and my only concern is that volume on OIH is curiously muted.
- The Big One – my family account, the biggie, is mostly short equity positions, balanced by some big gold shorts and energy longs. This one is down a little today (although still up nicely for the year, thanks to February), but it's hedged sufficiently to not get beaten up badly (today it was down one-third of one percent versus, which is less than a six of the market's gain).
- The IRA – it occurred to me this is actually a 401-k, but I've been calling it an IRA so long I'll just stick with that. Anyway, this is my only big winner this year, up about 38%, but only because it's made up a bunch of goofy little long positions. I've noticed the momentum on this is quickly waning, however, which kind of tells you what's happening to the cheapie stocks that, until lately, were lunging higher on days like today.
So I'm feeling surprisingly contented and at-peace with where things stand, even though today was a down day for me. It is demoralizing to see the kind of atmosphere that has crept in (although on Slope, bless you folks, things remain extremely civil and constructive). But no one cares anymore that the rally is based on ink fumes from printing presses. Buyers make the market go up, and we've got buyers in droves.
I've written off April 30th to the bulls already, particularly with the Messiah's victory lap tonight. Perhaps the start of a new month will clear the air. But I'm counting on nothing at this point, because rationality has taken a holiday.
