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Random thoughts.
Deep Thought of the Day: If you’re stressing too much for comfort over the big hit momo stocks have taken this week, you’re too long. Just something to think about. It’s why I always remind you of these types of moments when stocks are at HIGHS, rather than lows. And grand scheme of things, I don’t think betting on a bounce to relief your stress levels is ever a winning long-term strategy.
After a long, long break, I’ve started accepting offers to be interviewed on TV and newspapers, etc this week, and I’ve found it illuminating how scared the interviewers are about the 2-3% downturn in the markets. It’s as if people have forgotten that there’s risk in stocks and that corrections and sell-offs and panics happen. 2-3% ain’t nothing. It’s barely even what you lose on every buy and sell on commissions, slippage and spreads, if you think about it that way.
I’ve also noticed that my predictions five years ago that the Fed and corporate stimulus policies have been fueling a stock market bubble has finally become accepted wisdom. Or more accurately phrased, everybody seems to think that the Fed and corporate stimulus policies are providing a floor in the markets. It won’t end well when it does end, as I’ve been saying all along, but I’m not sure we’re near the end of the ongoing bubble blowing bull market yet. Just because everybody finally recognizes it, doesn’t mean we should become contrarians right now just for the sake of being contrarian.
@LunaticTrader posts terrific charts. Good playbook for $Gold traders in this one:
Gold stocks (XAU index) are also sitting at major resistance level near 100. Waiting for a breakout to the upside. If so then 140 becomes the target (= 40-50% upside potential). To the downside ~80.
And another terrific chart this morning from @LunaticTrader, underscoring the recent turn in the path of least resistance for the markets.
Another 113 stocks gave bull exhaustion signals yesterday, bringing the running monthly total to a very high 1310 = worse than mid March. Buy an umbrella or find shelter. #thistoowillpass
