Sobering words. I can recall only once having a week like this and walking out feeling like something worse looms: the week before the Crash in 1987.
The bad news: It had to be the worst day in the world to buy.
The good news: Anything you bought you were up pretty nicely on a year later.
This time you won't have to wait that long if things are that bad: the Fed will have to cry uncle quickly because the data will be awful.
And the president will come up with a way to do a deal with our allies that do not hurt us.
But the government shutdown didn't seem to matter one whit to the Fed. Anymore than the soft numbers from FedEx (FDX) , Micron (MU) , Carnival (CCL) and Accenture (ACN) , the last not even being thought of despite its impact on cloud migration forecasts.
Do I think we crash next Monday? No, or we would still be selling right now for actionalertsplus.com rather than committing some of our precious cash.
I sold heavily that Friday before '87 and only had a small put position in (JNJ) left when I walked out.
I made good money on those puts.
All that said, once again, this is a treacherous bear market. But even in bear markets you get spikes, usually short sharp ones. It was terrible for the bulls that we couldn't hold the rally earlier today after the New York Fed's John Willams made some positive comments.
But, despite the myriad defenders on television today saying how smart the Fed is, the fact is we all know this is a Fed-induced bear market, not helped by the president but he is not front and center or there would not be such a cascade of selling of stocks with nothing to do with China.
The data will go soft. The Fed will say they are at neutral. We are going to rally. But we need the data to turn soft enough -- chiefly employment data -- before they relent.
It's a shame.
I was in favor of the hike. I was never one who thought it was wrong. I am also a big believer, though, that the statements at the beginning of October were a de facto monster tightening.
And now we are just waiting to see when Main Street shows what happens when you tighten too aggressively.
