I told you in previous posts that his bearishness the last few weeks kind of validated my own bearishness-it helped my conviction. It's just that Cramer is so rarely bearish so when he makes bearish sounds you have to sit up and listen.
http://diaryofarepublicanhater.blogspot.com/2014/10/if-fundamentals-of-us-economy-are.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
He had given us a 10 point checklist on Mad Money that had to be met. He's now declared them met or at least mostly met and that we're now at an investable bottom. So as he soldiified my bearish conviction has he now softened it with his declaration that bearishness is over?
Not really. To be sure-I wasn't bearish because he was, just found it a compelling hint that I might be on the right track. Cramer is a congenital bull-at least since he started his tv show. In the old days at his hedge fund, you know it was different. Remember that time when that video of him talking about deliberately buying up the futures in the premarket then selling it all to drag down the market when it opened? Did Jon Stewart every savage him on that one.
http://www.huffingtonpost.com/news/jon-stewart-jim-cramer-interview/
http://www.thewire.com/business/2011/05/jim-cramers-still-bitter-2009-spat-jon-stewart/37699/
Here was Cramer on his hedge fund days.
http://www.youtube.com/watch?v=gMShFx5rThI
Let me just be clear: I think Jim got a raw deal there. However, this is why I'm hearing his declaration of victory of all things bullish, I'm not really listening to it.
Cramer has to be bullish on his show. His post hedge fund personal requires him to be what he himself refers to in the YouTube video above a 'moron Long.' It's the nature of the beast. The public doesn't understand the market too well and the idea of shorting a stock-of making money off it dropping sounds-well, evil. Again, remember the way Stewart spit his righteous indignation all over Cramer's face during that interview.
So I don't really hold it against him for not telling us everything he knows on Mad Money. Much of what he says on the show is the God's honest Truth. However, if he's committed any sin, it's the sin of omission. Out of necessity.
Listen, if you notice CNBC, very few like to be bearish publicly on that network. Even Fast Money where we have short term traders who know perfectly well that you can make money just as easily on the short as the long side don't like to talk to much about the short side. The entire network is totally biased to the long side.
What isn't commonly appreciated about bias, is just because you may be biased doesn't mean you're wrong. That's one answer I have to those who complain about the title of my blog.
CNBC may be biased but the bias doesn't hurt as much as it could. How much could it hurt? It would hurt a lot more if the network was congenitally bearish-as the fact is that over Keyues' Long Run, the market itself has a very strong bullish bias. Think about it. Since the Nasdaq driven bear market of 2000-2002 after the Internet boom-bubble of the nineties, the Dow and S&P have been up 10 of the last 11 years. Of course, the one down year-2008 was a doozy.
Still, the market usually goes up, for every 8 years, 5 to 6 of the years will be up years. So bulls have a built in advantage. Permabears then are less reliable than permabulls-they're going to be wrong more often. I'm no Sumner fan as you know, but he's right in what he's said about those who predicted 10 of the last 7 recessions.
I try then not to be biased to either the bull or the bear side-though I realize that usually it will be a bull market. I was very bearish in 2008 and made some money buying puts in the financials-of course, I'm not great at knowing when to say when. Since the March, 2009 rally, I haven't bean bearish since. I am still for now.
Cramer claims that most of his list was met today but he graded with something of a curve. Even the items most plausible like number 1-getting Ebola under control is pretty premature. By under control he means the news flow-as he said on his show tonight, the only way to get control of the disease itself is by developing drugs that will cure it.
It's not impossible that he's right and that we've gotten control of the news flow now. Obama gave a great 'fireside chat' with Chris Mathews Thursday night and has now named an 'Ebola Czar.' Still, it could be that we've gotten control of the headlines but it also could be that we haven't .The trouble is that we're already dealing with an Ebola crisis. By the WHO failing to contain it in a few African villages as it did in the past, this means that a simple quarantine will not solve the problem. We have an epidemic in 3 West African countries and it needs to be defeated there. With such stakes, how can we be so certain that there will be no more terrible headlines to jar the market? There was a health professional on CNBC Thursday morning who seems to think that while we won't have an epidemic in the US we will have the spectre of /30 or 40 cases in a major city'-if that's the case there will certainly be more headlines that will cause everyone to panic.
Arguably number 2 has come to fruition: we did see all stocks get hit on Wednesday-all the bulls including Cramer are calling this the 'whoosh' moment. I remember in 2008 there were many days that it was believed we had the 'whoosh' moment only to see that there would be others.
Number 3 is plausible-we did have 'specs' hit hard with Netflix losing 25% of it's value on it's disappointing subscription levels. Still, there could still be more. What about Amazon going lower? What about Google getting hit? The trouble here is the trouble in all of his list: many of his items have shown some progress but he seems a little premature declaring victory. I mean take number 4-oil has to find its footing.
On Thursday after touching $80, oil rallied a little. Cramer now declares it stabilized but , again, surely he's heard of a dead cat bounce. Indeed, oil actually weakened considerably today after rallying early to basically flat. How then can we be so sure that it's found a footing? Yet he declares that if oil is sold off again it will find a buyer. It just seems too early and with very little to declare this footing: I mean one rally of a dollar followed by a day it ended basically unchanged?
Nowhere is his case weaker though than on technicals. stabilizing. His case rested on the Vix falling sharply, It did fall $3.21 though that was a $1.60 above it's low for the day. I mean one day down in the Vix is enough to declare the technicals benign?
To me there are a lot of things that suggest otherwise. Again, look at how weak oil was today. Bond yields again fell today after rallying of it's dip beneath 2 percent on Wednesday. Also the small caps fell of again today after rallying all week. A lot of bulls have been arguing this shows we're at a bottom and that the small caps are the place to be, but it could just as soon be a relief rally which today suggests it was as the Russell lagged today. It seems to me these bulls are forgetting that we're at the wrong part of the economic and market cycle for the small caps-this is at the beginning of a recovery and a new bull market. Our bull market is 5 years old.
Then you have what is in many ways the worst performance of all: the S&P. For weeks the bulls had been prophesying that the S&P would bottom at it's 100 day moving average of 1905 and then bounce up like a jack in the box. I had my doubts, but even I was shocked in how the S&P fell right through the floor of 1905 with no bounce at all. It fell through that floor early in the week and never looked back. It then breached the next support level of 1875 without a look back and at the bottom on Wednesday was only about 17 points away from 1800 Even after today's 'biggest rally of the year'-the S&P never came close to threatening 1905-it never even got to 1900-and it finished at 1884-which is puts it another huge rally just to get to 1905.
That's a terrible technical performance which suggests that 1905 is probably resistance now already. It's quite plausible that the S&P will test 1800 again before it tests 1905.
Then we have the worst indicator of all: this was the biggest rally of 2014. Remember: the biggest rallies are always in bear markets.
UPDATE: Any discussion of Cramer is remiss without his great 'They know nothing' rant.
http://brotherwatchblog.wordpress.com/2014/10/16/orwell-ebola-isis-and-immigration/
It's right up there with the Rick Santelli rant-that started the Tea Party.
http://diaryofarepublicanhater.blogspot.com/2014/10/if-fundamentals-of-us-economy-are.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
He had given us a 10 point checklist on Mad Money that had to be met. He's now declared them met or at least mostly met and that we're now at an investable bottom. So as he soldiified my bearish conviction has he now softened it with his declaration that bearishness is over?
Not really. To be sure-I wasn't bearish because he was, just found it a compelling hint that I might be on the right track. Cramer is a congenital bull-at least since he started his tv show. In the old days at his hedge fund, you know it was different. Remember that time when that video of him talking about deliberately buying up the futures in the premarket then selling it all to drag down the market when it opened? Did Jon Stewart every savage him on that one.
http://www.huffingtonpost.com/news/jon-stewart-jim-cramer-interview/
http://www.thewire.com/business/2011/05/jim-cramers-still-bitter-2009-spat-jon-stewart/37699/
Here was Cramer on his hedge fund days.
http://www.youtube.com/watch?v=gMShFx5rThI
Let me just be clear: I think Jim got a raw deal there. However, this is why I'm hearing his declaration of victory of all things bullish, I'm not really listening to it.
Cramer has to be bullish on his show. His post hedge fund personal requires him to be what he himself refers to in the YouTube video above a 'moron Long.' It's the nature of the beast. The public doesn't understand the market too well and the idea of shorting a stock-of making money off it dropping sounds-well, evil. Again, remember the way Stewart spit his righteous indignation all over Cramer's face during that interview.
So I don't really hold it against him for not telling us everything he knows on Mad Money. Much of what he says on the show is the God's honest Truth. However, if he's committed any sin, it's the sin of omission. Out of necessity.
Listen, if you notice CNBC, very few like to be bearish publicly on that network. Even Fast Money where we have short term traders who know perfectly well that you can make money just as easily on the short as the long side don't like to talk to much about the short side. The entire network is totally biased to the long side.
What isn't commonly appreciated about bias, is just because you may be biased doesn't mean you're wrong. That's one answer I have to those who complain about the title of my blog.
CNBC may be biased but the bias doesn't hurt as much as it could. How much could it hurt? It would hurt a lot more if the network was congenitally bearish-as the fact is that over Keyues' Long Run, the market itself has a very strong bullish bias. Think about it. Since the Nasdaq driven bear market of 2000-2002 after the Internet boom-bubble of the nineties, the Dow and S&P have been up 10 of the last 11 years. Of course, the one down year-2008 was a doozy.
Still, the market usually goes up, for every 8 years, 5 to 6 of the years will be up years. So bulls have a built in advantage. Permabears then are less reliable than permabulls-they're going to be wrong more often. I'm no Sumner fan as you know, but he's right in what he's said about those who predicted 10 of the last 7 recessions.
I try then not to be biased to either the bull or the bear side-though I realize that usually it will be a bull market. I was very bearish in 2008 and made some money buying puts in the financials-of course, I'm not great at knowing when to say when. Since the March, 2009 rally, I haven't bean bearish since. I am still for now.
Cramer claims that most of his list was met today but he graded with something of a curve. Even the items most plausible like number 1-getting Ebola under control is pretty premature. By under control he means the news flow-as he said on his show tonight, the only way to get control of the disease itself is by developing drugs that will cure it.
It's not impossible that he's right and that we've gotten control of the news flow now. Obama gave a great 'fireside chat' with Chris Mathews Thursday night and has now named an 'Ebola Czar.' Still, it could be that we've gotten control of the headlines but it also could be that we haven't .The trouble is that we're already dealing with an Ebola crisis. By the WHO failing to contain it in a few African villages as it did in the past, this means that a simple quarantine will not solve the problem. We have an epidemic in 3 West African countries and it needs to be defeated there. With such stakes, how can we be so certain that there will be no more terrible headlines to jar the market? There was a health professional on CNBC Thursday morning who seems to think that while we won't have an epidemic in the US we will have the spectre of /30 or 40 cases in a major city'-if that's the case there will certainly be more headlines that will cause everyone to panic.
Arguably number 2 has come to fruition: we did see all stocks get hit on Wednesday-all the bulls including Cramer are calling this the 'whoosh' moment. I remember in 2008 there were many days that it was believed we had the 'whoosh' moment only to see that there would be others.
Number 3 is plausible-we did have 'specs' hit hard with Netflix losing 25% of it's value on it's disappointing subscription levels. Still, there could still be more. What about Amazon going lower? What about Google getting hit? The trouble here is the trouble in all of his list: many of his items have shown some progress but he seems a little premature declaring victory. I mean take number 4-oil has to find its footing.
On Thursday after touching $80, oil rallied a little. Cramer now declares it stabilized but , again, surely he's heard of a dead cat bounce. Indeed, oil actually weakened considerably today after rallying early to basically flat. How then can we be so sure that it's found a footing? Yet he declares that if oil is sold off again it will find a buyer. It just seems too early and with very little to declare this footing: I mean one rally of a dollar followed by a day it ended basically unchanged?
Nowhere is his case weaker though than on technicals. stabilizing. His case rested on the Vix falling sharply, It did fall $3.21 though that was a $1.60 above it's low for the day. I mean one day down in the Vix is enough to declare the technicals benign?
To me there are a lot of things that suggest otherwise. Again, look at how weak oil was today. Bond yields again fell today after rallying of it's dip beneath 2 percent on Wednesday. Also the small caps fell of again today after rallying all week. A lot of bulls have been arguing this shows we're at a bottom and that the small caps are the place to be, but it could just as soon be a relief rally which today suggests it was as the Russell lagged today. It seems to me these bulls are forgetting that we're at the wrong part of the economic and market cycle for the small caps-this is at the beginning of a recovery and a new bull market. Our bull market is 5 years old.
Then you have what is in many ways the worst performance of all: the S&P. For weeks the bulls had been prophesying that the S&P would bottom at it's 100 day moving average of 1905 and then bounce up like a jack in the box. I had my doubts, but even I was shocked in how the S&P fell right through the floor of 1905 with no bounce at all. It fell through that floor early in the week and never looked back. It then breached the next support level of 1875 without a look back and at the bottom on Wednesday was only about 17 points away from 1800 Even after today's 'biggest rally of the year'-the S&P never came close to threatening 1905-it never even got to 1900-and it finished at 1884-which is puts it another huge rally just to get to 1905.
That's a terrible technical performance which suggests that 1905 is probably resistance now already. It's quite plausible that the S&P will test 1800 again before it tests 1905.
Then we have the worst indicator of all: this was the biggest rally of 2014. Remember: the biggest rallies are always in bear markets.
UPDATE: Any discussion of Cramer is remiss without his great 'They know nothing' rant.
http://brotherwatchblog.wordpress.com/2014/10/16/orwell-ebola-isis-and-immigration/
It's right up there with the Rick Santelli rant-that started the Tea Party.
No comments:
Post a Comment