Boo! Trick or treat? You got it. Today is Halloween, October 31 and in this neck of the woods, the holiday is taken pretty seriously. Okay, not so seriously the market shuts down, but serious enough that folks will try to scare you right out of your shoes. Let me see …
Market Set For Swift Decline
The above is one spooky headline. Then again, it seems one idea of Halloween these days is to dress up to release your hidden desires, your fantasies about who you might really want to be. The person behind that headline probably is an investor who saw the market opening back in 2009 and went for it, and then went for it again in 2010, 2011, 2012, or for that matter, this year. So, this Halloween, that investor is “dressing up” as a wild-eyed wanderer screaming from the hilltop that the sky will soon fall. Yup, ya gotta love Halloween.
Even though the idea is based on a rather scary proposition, dead things coming back to life to haunt the living, it is not really scary at all, It is about fantasy, acting, and having fun. So, have some fun.
This year has been a big year, and it is natural that those who have fear in their life would see the huge gains in the market as untenable, unsupported, and unable to hold on. After all, the market is at or near record highs and it has gained over 20% this year alone, despite the headwinds of a sluggish US and global economy, threats from US politicos, and the fear of the Fed tapering. Oh, add one more thing to the list, an economy that has faltered now for years, an economy that is the largest trading partner of both the US and China.
- The Eurozone Oct business climate indicator rose +0.18 to -0.01, more than expectations of +0.01 to -0.19, and the highest in 2-years, and the Oct economic confidence rose +0.9 to 97.8, better than expectations of +0.3 to 97.2 and also the highest in 2-years.
The latter headwind is changing, or so it seems. Starting back in December of 2012, the “aura” about Europe began to change. Throughout this year, the data has been up and down, but always on an up trend. Look for that to continue.
As well, the VIX has been on a down trend for most of this year, and right now it is still low (13 plus). This is important because the VIX is a marker of fear and right now, it seems the fear has gone out of the market.
Another thought going into this Halloween is that, despite the goblins and ghosts present at this time of the year, the market has, at least for the last four years, tended to come out of October stronger than it went in. In other words, all the spooks yelling, “Boo!” has not scared the money out. The scary folks, or the scared folks, are still trying to scare, but the likelihood is that the market will finish the year as it has finished the last four years – up.
As I said, earlier, don’t be afraid today. Find a costume that represents your hidden desires, and then go out and be that person or thing you want to be. Have some fun with it. This is the one time of the year you can do that and no one will care. In fact, you might even win a prize if you are good enough at acting out your “other” self.
Trade in the day; Invest in your life …
