I am not sure where to go this morning, as the happenings in the world that affect the market are much and interesting, but, in particular, as the market climbs back to its top, the crazies are coming down from the hilltop.
- Wall Street continues to believe that the weather is the primary reason for the slowdown, and this will change soon. This excuse is only going to last for a short time. Already, the weather is breaking in New York: the region is expected to be above freezing every day for the next week.
Okay, so I start with the above because the tone is so, so, so … certain. Okay, so let’s play this out for a bit. The weather gets warmer in NYC for two weeks, say, and this then proves the recent spate of soft economic data is not about the weather, rather it points to a serious economic downturn? Wow!
- A little over a week ago, an article made its way around the Internet where the author compared this market to the Dow of 1929. I’m not going to name names, but I do respect the technicians behind this article who have an excellent body of work.
I move next to the above because my lower jaw is hanging so far down I need to bring it back up or I risk breaking it. Seriously? Did I just read that right? The author of the utter nonsense about the imminent market collapse ala 1929 that went viral a couple of weeks back relied on technicians who have an “excellent body of work.” Well, then how about this? This might be true, but, on this one, the “technicians” have rolled off the tracks, missed the boat, crashed the airplane, fell off the bike, or, to choose one last silly transportation metaphor, stumbled badly.
- So Friday starts 260 weeks off the March 6, 2009, bottom — the Mark Haines bottom. March 10 is the 610th day off the October 2011 low and March 20 is the Gann Master timing cycle turn point. So those of you who’ve been waiting for a major trend change, if it’s going to happen, the time and place is coming. That’s not a prediction; it’s managing the probability of risk. I’m not ruling out anything, including a redux of the 1937 top.
The above actually provided some humor for me this morning. “So those of you who’ve been waiting for a major trend change, if it is going to happen, the time and place is coming.” The author is really going out on a limb here giving hope to the true believers – finally, the end is near. Oh! The writer does not say when or where?
Wait! Yes, the writer says on March 20th the day of reckoning is coming to the market. The Gann Master timing cycle says so. But, it is not a prediction; it’s “management of probability of risk,” whatever that means. Just so you know, the 1937 market top signaled a five-year bear market.
Anyway, here is another gem, a bit off the topic of imminent doom, but, nevertheless, interesting because of its allusion to doom. Sorry, it is interesting because it appeared on Bloomberg News, which just goes to show you that the move away from editors in journalism (to cut costs) is a big mistake.
- China pared its position in U.S. government bonds by $47.8 billion, or 3.6 percent, to $1.27 trillion, the largest decline since December 2011, according to U.S. Treasury Department data released yesterday.
True. This is fact, but then we have a bit of supposition, designed, no doubt, to pique the readers’ interest.
- If China continues to sell again in the next month or two, than more worries will arise as to who will buy the country’s debt.
And yet, the writers address that “worry” with a rather astonishing statistic that appeared as an immediate follow up to the first statistic I mentioned.
- At the same time, international investors increased holdings by 1.4 percent, or by $78 billion, in December, pushing foreign holdings to a record $5.79 trillion.
Apparently, the percentages don’t tell the real story. True, it appears as if the Chinese “sell-off” of US holdings is a net loss for US Treasuries (3.6% vs. 1.4%). In actuality, though, it is a net gain for US Treasuries ($78b vs. $48b). So, where does the worry come in?
The drought here is in California is dragging on. The news here is playing up the potential devastation to the largest producer of agriculture in the US. Good news? We are expecting rain tomorrow, and a lot of it. Bad news? We have a 100% chance of rain, so they say.
Trade in the day; Invest in your life …
