The Bear Case in 10 Easy Lessons

 | Apr 11, 2014 | 6:56 AM EDT
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To me the bear case is as easy as pie.

Let's dispense with all form. Here it is.

  1. Something is very wrong with the market when we get strong news out of the economy and interest rates plummet. That's a fear of an unknown unknown. What's the point of buying when there is something lurking?
  2. When interest rates plummet, the banks plummet, particularly now that the short rates aren't going higher. Banks are the linchpin of all big rallies and we have lost them.
  3. There is no price where the insiders won't sell these extended techs with no dividends or earnings.
  4. We have had a big run from the bottom, almost a triple, so it has to be out of gas and extended. It was just high-multiple stocks. Now it is every stock.
  5. We've seen this movie before in 2000. In fact, it was this week to the week that we were really beginning to thrash with the really awful dot-coms -- the equivalent to what has come public like FireEye (FEYE) and Splunk (SPLK) -- crashing daily and the insiders still selling no matter what the case.
  6. Japan's a disaster.
  7. China's a disaster.
  8. The world's being kept afloat by central bank fiddling.
  9. The initial public offering flow doesn't stop.
  10. Earnings will be terrible.

There, I made it. It's very easy to stand by. In fact, it's so easy that, perhaps, it's too easy, too obvious.

But for the moment I am just going to put it out there so I can say "don't I know it," and "I see how we can get hammered."

Now I feel better. I have seen the call. I know the drill. And it does merit more downside.

Then let's see what happens to the obvious scenario. Maybe it won't be so obvious at lower prices. Maybe that's what the bulls need in response to the obvious scenario. Time and price can do an awful lot for a market that's now scorned, hated and with a nasty sea change.


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