BEAR MARKET..?
A couple of posts ago, I said to "take your positions and set your stops," since it seemed, according to all the proprietary technical indicators that I use and trust (inasmuch as "trust" is possible in the always uncertain realm of world stock markets), that an "all clear" signal had finally arrived. Well, it did arrive, we had a quick mini-rally (in certain badly-flogged stocks), and it disappeared just as quickly.
The current market action, taking into consideration its behavior and trajectory since mid-May, surely seems and "feels" like a Bear Market. We have lower highs and lower lows set with regularity, there is no real leadership from any sector, the once proud and prosperous Tech sector (the "Nasdown") is radioactive garbage, and the global markets have suffered quite a bit in the last week because of the outbreak of hostilities in the Middle East. Just what we need, on top of all the week seasonal factors and "vomit comet" stock market - a war in the Middle East to settle the Bear Market question!
How long can the punishment last? Well, your guess is statistically just as valid as the next guys - nobody really knows. If they did, they could have cornered the world's wealth long ago by buying the appropriate puts and calls. Uncertainty is a fact of existence, and surely holds for the stock markets. My best guess, based upon my years of experience in market observation, trading, and investing, is that this will be a textbook Bear Market, lasting ca. 6 months (May - Nov.) and shaving off some 10-20% off of global markets. Some overvalued and overheated markets and sectors have already declined as much since May; some far worse (emerging markets - lately "submerging markets" - gold, etc.)
Look - we have multiple wars and "rumors of wars" (think North Korea and Iran), profit slowdowns from US corporations, much higher interest rates than a few years back, record high oil and gas prices, etc. - shall I go on? The seasonality factor is lousy, too - we have entered the weakest market season of the year - now through September, traditionally some really unrewarding times to be invested in the market.
Coming into view now, as well, are the November elections, which promise to be bitter and divisive. The Republicans could stand to lose big time this fall. It will be interesting. Bottom line is that political uncertainty is never good for the market either, and the election of people hostile to capitalism is never any good. We shall see...
And God knows what the "Fediots" will do to further ruin our already weak economy...
It seems that this market bears the imprint of the hedge funds in every aspect, as well. They seem to be moving and jerking the market every which way. The little guys, still bludgeoned from 2000-02, have long since departed and left the game. We don't really have much "buying power" except for the hedge funds, all playing similar technical angles of buying and selling targets, which would well explain the range-bound, go nowhere overall market we've been in for quite some time now (a few rallies here and there, and just as quick severe declines). Like some Biblical prophecy of "7 years of prosperity and 7 years of famine" (cf. Genesis - the story of Joseph in Egypt), this seems to be the blueprint for 1993-2000 ("prosperity"), and 2000-2007. This current rotten decade has only had one truly good, comprehensive year for the markets - 2003 - smack dab in the middle of some truly miserable years. The US stock market has proven to be a toxic, radioactive waste dump for dead capital...
Best place for new money - Cash! (No longer "trash.") Most money market accounts are paying 4%+ these days (have you noticed?), and the risks in any other asset class at this juncture are enormous. Don't get suckered into taking any big bets right now - you will be sorry.
Beyond plunking new money into cash, my best advice is to wait until the dust settles on some of these debilitating issues - wars, the Fed, the hurricane season, the election, etc. We could be laying the groundwork for a nice (and traditional) fall/winter rally.
TTC
A couple of posts ago, I said to "take your positions and set your stops," since it seemed, according to all the proprietary technical indicators that I use and trust (inasmuch as "trust" is possible in the always uncertain realm of world stock markets), that an "all clear" signal had finally arrived. Well, it did arrive, we had a quick mini-rally (in certain badly-flogged stocks), and it disappeared just as quickly.
The current market action, taking into consideration its behavior and trajectory since mid-May, surely seems and "feels" like a Bear Market. We have lower highs and lower lows set with regularity, there is no real leadership from any sector, the once proud and prosperous Tech sector (the "Nasdown") is radioactive garbage, and the global markets have suffered quite a bit in the last week because of the outbreak of hostilities in the Middle East. Just what we need, on top of all the week seasonal factors and "vomit comet" stock market - a war in the Middle East to settle the Bear Market question!
How long can the punishment last? Well, your guess is statistically just as valid as the next guys - nobody really knows. If they did, they could have cornered the world's wealth long ago by buying the appropriate puts and calls. Uncertainty is a fact of existence, and surely holds for the stock markets. My best guess, based upon my years of experience in market observation, trading, and investing, is that this will be a textbook Bear Market, lasting ca. 6 months (May - Nov.) and shaving off some 10-20% off of global markets. Some overvalued and overheated markets and sectors have already declined as much since May; some far worse (emerging markets - lately "submerging markets" - gold, etc.)
Look - we have multiple wars and "rumors of wars" (think North Korea and Iran), profit slowdowns from US corporations, much higher interest rates than a few years back, record high oil and gas prices, etc. - shall I go on? The seasonality factor is lousy, too - we have entered the weakest market season of the year - now through September, traditionally some really unrewarding times to be invested in the market.
Coming into view now, as well, are the November elections, which promise to be bitter and divisive. The Republicans could stand to lose big time this fall. It will be interesting. Bottom line is that political uncertainty is never good for the market either, and the election of people hostile to capitalism is never any good. We shall see...
And God knows what the "Fediots" will do to further ruin our already weak economy...
It seems that this market bears the imprint of the hedge funds in every aspect, as well. They seem to be moving and jerking the market every which way. The little guys, still bludgeoned from 2000-02, have long since departed and left the game. We don't really have much "buying power" except for the hedge funds, all playing similar technical angles of buying and selling targets, which would well explain the range-bound, go nowhere overall market we've been in for quite some time now (a few rallies here and there, and just as quick severe declines). Like some Biblical prophecy of "7 years of prosperity and 7 years of famine" (cf. Genesis - the story of Joseph in Egypt), this seems to be the blueprint for 1993-2000 ("prosperity"), and 2000-2007. This current rotten decade has only had one truly good, comprehensive year for the markets - 2003 - smack dab in the middle of some truly miserable years. The US stock market has proven to be a toxic, radioactive waste dump for dead capital...
Best place for new money - Cash! (No longer "trash.") Most money market accounts are paying 4%+ these days (have you noticed?), and the risks in any other asset class at this juncture are enormous. Don't get suckered into taking any big bets right now - you will be sorry.
Beyond plunking new money into cash, my best advice is to wait until the dust settles on some of these debilitating issues - wars, the Fed, the hurricane season, the election, etc. We could be laying the groundwork for a nice (and traditional) fall/winter rally.
TTC
posted by thoughtful conservative at 4:00 PM
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