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Is All the Angst Warranted?
Turn on CNBC. Read the headlines. You would think we are already in
a bear market having lost 20% or more from the highs in equity prices.
Or is that coming? In reality, the major equity indices are struggling
to hold onto their gains for the year, and this is after gains of 100%
plus over the prior 2 years on the major equity indices. I am
scratching my head to figure how or why there is a whole lot of angst
out there. Sure there is a lot to worry about with Greece, sovereign
debt, unemployment, a slow down in China, stagnating US growth, gridlock
in the US, housing, and on and on….these were concerns many months ago,
and they are still with us today. So why now? My guess is that if you
were a buyer of the kool aid and hype several weeks or even months ago,
your positions are now underwater or you have seen your gains
evaporate. That is where the angst is coming from.
So is the angst warranted?
Taking a longer term view by looking at the monthly charts of the
major equity index ETF’s my answer is “No, the angst is not warranted.”
See figure 1 a monthly chart of the S&P Depository Receipts
(symbol: SPY). The SPY is still within a nice up trend channel, and in
fact, it is approaching the lower end of that channel. From that point
of view, this would seem like a good buying opportunity. How it will work out several months from now is another story, but if I had to be a buyer, I would rather be a buyer down here than where the market was a few months ago.
Figure 1. SPY/ monthly
Figure 2 is a monthly chart of the PowerShares QQQ Trust Series
(symbol: QQQ), and it shows the same thing. An asset that is is in a
well defined up trend with prices approaching the lower end of its trend
channel.
Figure 2. QQQ/ monthly
Angst? The longer term view has me asking, “What angst?”
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Ooooh! A nice upward trend from 2009! Yes, that really must mean it will go up forever. /sarc
You actually think buying at the top of a crest is a good idea? Why not just scrap the rest of the article and say that it's all herd mentality and you do as others do. That, at least would be more honest.
Last figure I heard was $600 trillion+ mostly in interest rate and currency bets held by guess who? Too Big To Fail Banks and Financial Institutions looking for the next unregulated Gig.
These are the same knuckleheads that after the whole thing comes crashing down, will claim they called it. Sigh...
Looks like a bit more 'angst' is popping up this afternoon, better pray like crazy that imaginary support line holds.
Why don't we see how the markets survive the end of QE2 before we consider this to be a "buying opportunity". Charts and graphs are nice, but they're still only yesterday's news.
by the way, an interesting twist on why collapses come in October is to also know the original cycle of cash on hand during the agricultural age. When greenbacks (fiat currency issued during the Civil War) were first introduced, there was a limited amount, enough to allow business to occur.
During the months when the harvest was coming in, cash was needed in the hinterlands, leading to a massive exodus of fiat currency. This left very little in the financial capital of NYC. A few enterprising individuals realized they could bring the system to its knees by pulling money from their bank accounts, leading banks to place loan calls on other banks, and then lock up their withdrawals in a personal safe. In fact, the system was known as a "Lock Up".
This caused a massive shortage of available cash for capital transactions, leading to the sale of stocks and bonds to somehow get cash, and creating an overall depressive state of affairs.
I'm not sure we're quite so far advanced out of this. While the agricultural calendar no longer rules the market, certainly other factors are active in creating similar situations.
I think that's all legit. But this guy is talking short to mid-term trade.
A Depression MAY be the short to mid-term trade....but is unlikely.
I would lay odds that October (funny how that month is a recording) is the month to worry about.
In response to the "do you want to make money or not?" question by thetecnhicaltake...
That's not what your article suggests. Your article suggests that anxiety about the economic state of the world is mis-placed.
Of course it's possible to make money on a downturn if you make the right calls (and have lots of luck, or run the rigged markets).
Your article finishes with the following line: Angst? The longer term view has me asking, “What angst?” which is just fucking stupid.
If you're asking "what angst?" then how can you expect to be taken seriously? Your points about whether to buy or sell may have some validity, but to express them in this way is idiotic.
Yo Dog:
What angst? Yes, the angst is there ...we see it everyday in the news but this longer term chart has yet to crack...that is my point....if there is angst, this chart doesn't show it
Yes, I see the point. Maybe I read the article completely wrong. I interpreted it as "there's no need to worry about current conditions - the chart shows all is doing well." Maybe that isn't quite what was meant, but there are tons of politicians and financiers who say precisely that and it's infuriating.
'No, the angst is not warranted'
I just hope the markets take a sudden 5% plunge to shut up the sparkle rainbows and pink unicorn crowd up for 1 day at least.
If SPY breaks through the support channel the author is sure will hold, you can bank on your 5%
Well, TechnicalTake, you've come to the internet's most rabid mental ward, armed with only a sock puppet to cheer us up.
Hahaha. And the sock puppet has a stain, no less.
I like the fact that Turd's new website (tfmetalsreport) includes the running national debt clock. Check it out.
Free crack Ponzi stock addicts, dont worry no cause for angst....there will always be more unicorns that shit giant piles of free pure crack cocaine rocks to power bullshit stocks endlessly higher. Party on.
The angst sweeping the world is not about lines on a chart - its about what hundreds of millions of people see happening in their daily lives and the lives of everyone around them. This is such a classic "Ivory Tower" piece of crap it is truly funny. Hey - as long as you're getting paid good money to come up with Pollyanna pronouncements like this why should you feel any angst at all? And of course if you aren't feeling any angst, then all those unwashed, unenlightened masses who do must be idiots, unlike you - right?
The problem with the Government disinformation specialists is that all assume we are economically challenged. They have come to the wrong site. Better to hit WAPO or the NYT to spread this crap. The 'worshipers" of Progressive Keynesian dogma will lap it up.
I was just taking a look, and the macd histogram bottomed out on the s and P and 1277 on the 8th of june, which tells me you should be slowly adding longs on the lower lows to minimize losses.
adding on "lower lows" seems like a fast way to go broke. Would rather add on higher lows.
Get short shitty debt laden companies with questionable accounting like HOG and Darden.
This guy is nuts. Some examples of what other analyst think: http://t.co/mSGnFPF
Yastrow: "What we’ve got right now is almost near panic right now with money managers and people responsible for money… Ben Bernanke is driving everything. There’s a difference between Ben Bernanke and Harry Houdini. Ben Bernanke is not a magician. We’re on the verge of a great, great depression and the Fed knows it."
Barofsky: You should be scared. I’m scared. You can’t not be scared. You can’t look at what happened in the run-up to 2008 and see how it’s not going to repeat itself, given what we’ve done.
Taken one by one these problems seem tractable, especially Greece. But they are arranged like dominoes, one ready take out the next. Worse, there is one overriding cause for all this: a conspiracy of debt creation worthy of a loan shark, destined if not designed to enslave the world.
We are looking at a fundamental phase change in human society, which will not show up on a chart unless you go back centuries. I can't say whether the aspiration of the bankers will be fulfilled, or whether the peoples of the world will rise up and put the bankers back in their cage. I do know it doesn't show up on a 5 year chart of the QQQ.
like everything else it is about where you buy.
It's about what you hold and what what you hold is worth. What price you bought at is only for statistics. Think about it.
Yes and whether or not where you bought is deemed a good point to buy Ponzi stocks is never clear until the rear view mirrors show the results. Party on, degenerate gamblers.
yes...agree totally....my point: I would rather be a buyer here than 6 weeks ago
If you are looking to get into the market (i.e. buy), would it not be more prudent to wait for support to be confirmed? "you would rather be a buy here". Personally, I would rather be a "buyer after a confirmed bounce off support" than catch a falling chainsaw here.
Youd rather be a buyer here than 6 weeks ago based upon what, the real world is so much better today or squiggly lines on a graph or the idea that more free crack hits will be provided?
Sounds reasonable if you can continue to ignore the real cost of doing business, debt burdens, and a derivatives market of over 200 trillion (not a typo) that still needs to unwind itself. I guess any and all easing or stimulus needs to be turned off immediately. "Mark to unicorn" accounting forever!
totally agreed....ignore the news
"ignore the news" - that's just dumb.
A year ago, ISDA says the global derivatives market was REPORTED as $466T. This, they say, does not include UNREPORTED swaps. http://www2.isda.org/attachment/MjQ3OA==/press102510.html
http://www.bis.org/statistics/derstats.htm has it as $600T in Dec 2010. I'm in no way surprised by this number.
That number on the dervis market always interest me LoP. I see the number 600 tril get tossed around. Does anyone really know?
"Mark to unicorn"
That's a good one!
The only reason the market has been in an uptrend is due to Uncle Ben. Ben is now temporarily turning off the spiggot, so now stocks will tank. But don't worry....Uncle Ben will come back to save the day! I'll be a buyer once QE3 or whatever clever name they come up with is announced.
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The SPY is still within a nice up trend channel, and in fact, it is approaching the lower end of that channel. From that point of view, this would seem like a good buying opportunity. How it will work out several months from now is another story
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listen IDIOT , PRINT US DEBT DEBT CHART on your wall and
try to analyze fucking nice trend..
do you understand ,asshole , that USA was in depression alst 3 years, cause printing 1.5-2 trln per year and having real GDP no bigger than 10-11 trln is called depression..?
tell about nice trend to 45+ mln adults who is on food stamps , or +20% who is under/unemployed..
what an idiot
alx
Do you want to make money or not?
You don't actually trade do you...If you're taking positions based on a single arbitrary trendline on a monthly chart, oh man.
So you are saying that you BUY right here???
I wouldnt buy $500 of stocks if Bernank handed me a sack of $10,000 freshly printed up FRN's.
'Money'? Whats money? You mean that crap theyre printing up in the trillions monthly just to keep this clownshow going a bit longer?
Zero hedge should replace the comment captcha with a set of currency vs. money quizzes.
Im making far more currency than money, PM's are real money, printed up notes are failed currency.
I was going to comment about the debt pacman, but you were much more eloquent. If the auther believes in a "zero-sum" stockmarket, he will need to factor in the exponentially increasing debt payments needed to maintain the current GDP. These debt payments need to come from somewhere. Monies paid on debt is monies not pumping the SPY.
Exactly. The angst isn't caused by where the graph is going, the angst is caused by the overwhelming evidence that our economies are fucked.
How the hell can someone draw a line and say "don't worry" when more and more people are on the breadline and nations - NATIONS are effectively bankrupt?
Piss on this stupid graph. Show the graph to someone who just got made redundant.
Like you say, show the graph of US (or UK, or Greek, or Irish etc) debt.
Is the OP suggesting that my angst is misplaced? If so, what exactly is the threshold at which I should be feeling anxious?
Sorry, but stuff like this makes my blood boil. It's wilful denial.
The angst is never warranted until after the fact, for some.
For instance, giddy Pandora buyers on yesterday mornings open? All the charts and analysts were gushing optimism, it could only go up, after all its an IPO and getting rockstar treatment. Lot of 'angst' among those degenerate gamblers today I suspect.
What me worry?
This will surely pop a few heads. If you are on anti-depressants be sure to visit the medicine cabinet B4 reading aforementioned.