My bear case I drew after the market went up 275 on a very good nonfarm payroll number a couple of Fridays ago has been borne out.
http://diaryofarepublicanhater.blogspot.com/2014/10/was-todays-275-point-dow-rally-another.html
http://diaryofarepublicanhater.blogspot.com/2014/10/can-you-have-bear-market-without.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
I still wonder if you can have a bear market without a recession. It's a logical possibility obviously, but have we ever had one? I guess the 1987 market crash was one case. We literally fell into a bear market in one day's huge 20% sell off.
I don't see too many bull signs for the market at this point. I have no problem admitting to you that a big part of validating my bear case for was the fact that Jim Cramer has gone bearish. I was bearish but I found real confirmation in him-as he's anything sooner than a permabear; indeed, you have to give him credit here for proving that he's not a permabull.
The technicals have been terrible. The market bulls-like for instance most of the traders on Fast Money-were all telling us that the market would test 1905 on the S&P and bottom there. I wasn't convinced, but even I was shocked that it just went through the 1905 floor without a whimper. The next technical level is 1875 but it fell through that floor pretty easily as well, falling 13 points beneath it on Monday and yesterday's failed hiccup of a rally let the S&P at just 1877. Yesterday's market started out trying to rally sharply but by day's end it looked less like a rally than a cry for help.
Today the market is down again, certainly not helped by a new headline about another Ebola victim in Dallas-another healthcare worker.
http://www.cnbc.com/id/102078869?trknav=homestack:topnews:2
Based on the way the futures look, the S&P could test 1850 today.
Bank earnings have been pretty good-Citi had a blowout quarter; still the fact that it closed operations in 11 markets worldwide is another worry; bear in mind that big worry that's been sinking the market is about global growth-rather than US growth which at present continues to look very healthy.
We also have oil free falling again. This may be a good thing for consumers and businesses that use oil or who's customers use oil but it's not a good thing for the equity market-according to Jim Cramer a lot of the funds out there use computer programs that automatically sell the S&P when oil prices fall. It appears that at least a lot of the oil companies will really begin to feel the pain if prices drop beneath $80-and Western Texas Crude is right down at $80 this morning.
So when does the market hit bottom? One big tell is when Cramer says we've hit it. I know there's been lots of pieces that knock him for getting individual stock picks wrong-who can forget the way Jon Stewart savaged him?
Yet, here, I find him very credible-as he so clearly always wants to be bullish and as the market has acted just like he's said it will during this selloff.
He's surely right that the market can't really rally until some kind of bottom is found in the commodities space.
As for oil prices-the conventional wisdom-at least the conventional market wisdom-is that it will magically bottom at $80 just as this same wisdom told us the S&P would magically bottom at 1905. Who knows-maybe low oil prices could be the new normal? Everyone thinks that OPEC at some point will have to cut production but there are a lot more divisions in OPEC than in the past and the Saudis don't seem worried at this level. Now with Iran cutting prices for Asian customers maybe it won't snap back as quickly as presumed.
Remember that we had two decades of bargain basement oil in the 80s and 90s and we had very strong economic growth in that period.
If the oil drop is supply rather than demand based it could be a good thing long term The worry is that all that new oil found in the US won't be drilled for if prices fall too low.
http://diaryofarepublicanhater.blogspot.com/2014/10/was-todays-275-point-dow-rally-another.html
http://diaryofarepublicanhater.blogspot.com/2014/10/can-you-have-bear-market-without.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
I still wonder if you can have a bear market without a recession. It's a logical possibility obviously, but have we ever had one? I guess the 1987 market crash was one case. We literally fell into a bear market in one day's huge 20% sell off.
I don't see too many bull signs for the market at this point. I have no problem admitting to you that a big part of validating my bear case for was the fact that Jim Cramer has gone bearish. I was bearish but I found real confirmation in him-as he's anything sooner than a permabear; indeed, you have to give him credit here for proving that he's not a permabull.
The technicals have been terrible. The market bulls-like for instance most of the traders on Fast Money-were all telling us that the market would test 1905 on the S&P and bottom there. I wasn't convinced, but even I was shocked that it just went through the 1905 floor without a whimper. The next technical level is 1875 but it fell through that floor pretty easily as well, falling 13 points beneath it on Monday and yesterday's failed hiccup of a rally let the S&P at just 1877. Yesterday's market started out trying to rally sharply but by day's end it looked less like a rally than a cry for help.
Today the market is down again, certainly not helped by a new headline about another Ebola victim in Dallas-another healthcare worker.
http://www.cnbc.com/id/102078869?trknav=homestack:topnews:2
Based on the way the futures look, the S&P could test 1850 today.
Bank earnings have been pretty good-Citi had a blowout quarter; still the fact that it closed operations in 11 markets worldwide is another worry; bear in mind that big worry that's been sinking the market is about global growth-rather than US growth which at present continues to look very healthy.
We also have oil free falling again. This may be a good thing for consumers and businesses that use oil or who's customers use oil but it's not a good thing for the equity market-according to Jim Cramer a lot of the funds out there use computer programs that automatically sell the S&P when oil prices fall. It appears that at least a lot of the oil companies will really begin to feel the pain if prices drop beneath $80-and Western Texas Crude is right down at $80 this morning.
So when does the market hit bottom? One big tell is when Cramer says we've hit it. I know there's been lots of pieces that knock him for getting individual stock picks wrong-who can forget the way Jon Stewart savaged him?
Yet, here, I find him very credible-as he so clearly always wants to be bullish and as the market has acted just like he's said it will during this selloff.
He's surely right that the market can't really rally until some kind of bottom is found in the commodities space.
As for oil prices-the conventional wisdom-at least the conventional market wisdom-is that it will magically bottom at $80 just as this same wisdom told us the S&P would magically bottom at 1905. Who knows-maybe low oil prices could be the new normal? Everyone thinks that OPEC at some point will have to cut production but there are a lot more divisions in OPEC than in the past and the Saudis don't seem worried at this level. Now with Iran cutting prices for Asian customers maybe it won't snap back as quickly as presumed.
Remember that we had two decades of bargain basement oil in the 80s and 90s and we had very strong economic growth in that period.
If the oil drop is supply rather than demand based it could be a good thing long term The worry is that all that new oil found in the US won't be drilled for if prices fall too low.
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