To be pat is to be wrong. If you decide that the stock market is just in crazy bear-market spike mode you better know whether there is a cessation of selling. You better know if there is no crescendo. You better be anchored in more than "this is what a bear-market spike looks like, a rip-your-face-off spike" because we haven't had enough bear markets in the last 30 years to even make a judgments and the ones we have had indicate that unless there are more issues of the same kind to occur -- more tightenings, more earnings shortfalls, more policy gaffes you may not bring out sellers.
They might be done.
Look, like you, I don't want to be bullish. That's too phony, right?
But if you actually look at the crash we have had since the beginning of October it is about as bad as I have ever seen.
The banks, the industrials, the retailers, the techs, especially the semis, these have been obliterated.
Now we know that there are all sorts of issues that tell us that the selling can't be done. Oil, for example. If oil goes down again tomorrow the algos are going to be set up to sell. FANG-it is just too hard. The bozos at Facebook (FB) switched the Instagram feed today away from scroll. I mean are you kidding me? Amazon's (AMZN) up so much yesterday that it's very hard to imagine a follow-up. I reiterate that I wish Apple (AAPL) would pre-announce so we can get that over with, even as I loved the piece by Jhonsa today about India and iPhone. Who knows anything about Alphabet (GOOGL) these days.
In fact, today was an odd amalgam. The cloud kings - Adobe (ADBE) , Workday (WDAY) , Salesforce (CRM) , Service Now (NOW) -- just roared. But so did Clorox (CLX) , the marquee name in soft goods. So did Lilly (LLY) , the now idolized drug company. So did Mcdonald's (MCD) , still a crowd pleaser from the restaurant game. P&G (PG) and Kimberly (KMB) are too expensive but their gross margins are going higher off of energy and easier transportation compares.
Those aren't usually together. I regard it as positive.
I like the action in Walmart (WMT) , leaping from $85 to $91 when people decided it was "over and done with" just because it was going down. The fact that Walmart, like so many others, couldn't get anywhere near its Monday low-it couldn't even take out $88, seems rather amazing.
Why am I pointing all of these out? Because all bear markets end with short squeezes and rip your face off rallies.
ALL OF THEM.
That's why I hate the idea of keying off of the "action" to make a decision.
I do care about the oversold position -- and we are more oversold than yesterday -- because of reason: it is so darned apples to apples.
When we get to minus 10 or worse we can look at discrete days and recognize when it made sense to buy and when it didn't.
Today was very similar to 2011 when the forces that were at work -- worries about banks falling apart in Europe -- just couldn't take us down despite a tremendous linkage that still exists but isn't that important.
There was no second 9/11.
We didn't have a second Long Term Capital.
But we had Bear and Lehman and Wachovia and Citi and Fannie and Freddie and Washington Mutual and Merrill and AIG.
One after another after another.
We had a failed TARP vote.
We had a new president.
We had a Fed that said it was powerless.
Every single one of those rallies HAD to be sold because the events just kept repeating each other and there was nothing good happening: bad data, bad failures, bad banks, bad everything.
So now let's think about what we have this time.
We have an errant Fed with a chairman who is getting roasted by all but acolytes of the institution for his insistence that he is both data dependent and data independent. You can't have it both ways. That's just, well, so lacking in rigor as to be astonishing.
You have a Treasury Secretary who calls the largest banks in the country to check in? When I heard that I said to myself, 'what a bonehead. Why the heck did he call in from Cabo to do that?'
The only thing I heard that was grown-up was the possibility that something good could happen with China.
I found the period between Powell's press conference and Tuesday to be about as dispiriting as any I can recall.
At the same time, though, it was MAN-MADE.
I have no doubt that if Powell had channeled Janet Yellen instead of the fed's silly models we would be climbing from a much higher level.
But he didn't.
Now he has to re-think. He has to recognize that just because holiday sales are good it isn't the end of the world. He has to pay attention to the shutdown. He has to recognize that housing is terrible. He has to stop thinking that when you add 200,000 people to the work force or wages go up a few pennies that we aren't headed for Weimar and Wheelbarrows.
You know when I heard him say "two rate hikes" I made up my mind that I was not going to say "they know nothing."
Instead I was just going to say "he doesn't know the power of his words."
He's not deserving of "they know nothing" because that was a different time, a time when the theatre was just getting' lit.
This is more of a schooling. He's getting schooled. I am happy to help doin' the schooling even as I was the only teacher in the school for two months.
