If DaBoyz were going to reverse the blood-dimmed tide last week, it was most likely to have occurred in the final hour on Friday, when bears typically grow antsy about taking short positions over the weekend. Short-covering, as we know, is by far the most potent and dynamic source of buying power — not only in bull markets, but in bear markets as well. Rooted in panic, short-covering is the only source of buying strong enough to push stocks through heavy layers of supply and to new record highs. In comparison, the steady flow of institutional money into a bull market is a relative trickle — supportive of stocks, but insufficient to spike them to unaccustomed new levels.
Alas, the broad averages ended last week only ticks off their lows, unable to summon even a weak flurry of short-covering to save face. As such, stocks will confront the same problem they did last Sunday when index futures opened for trading: i.e., a dearth of good news. Still worse for investors is that the single kind of news they have been forced to care about — i.e., mostly-meaningless blather from the Fed — laid an egg Wednesday with a well-discounted announcement about tightening that literally no one bought into.
Dollar’s Role in Triggering a Bear Market
It’ll be a while before we hear anything more from the Fed, and ordinarily we might expect shares to drift trendlessly for the next few weeks. The trouble is, the broad averages have not been drifting lately; rather, they have been falling hard and threatening to gain momentum. That is my expectation, and I have precisely qualified it with a 22,544 (or alternatively 22,822) Dow target that lies 989 points below. The selloff could steepen, as I noted here earlier, if the dollar starts to rally strongly. That could signal a sea change in institutional mindset: one that would make the possibility of a full-blown bear market — as opposed to a mere 4000-point correction in the Dow — seem not only more logical, but more likely.
America and the world revolve around ‘investments, and at no other time in history have we seen so many involved in a ‘new era’ as to how the world works.
The internet/ IP phones etc. are full of stock traders blogs, investment services by neighborhood banks at large chain grocery stores in a kiosks setting turning persons for decades towards investing. Almost seems like the days of the late 1920s, when a family shopping for foodstuffs could hear loudspeaker announcements concerning the ups and down of popular stocks.
100 years ago 80% of Americans owned their own business and determine their own destiny. Today only 20% own their own business, but the need today is create by simply filing in a line, ‘hook line and sinker’ towards the investment process of a guaranteed outcome as advertised. The need to ‘own’ has always driven one’s destiny but today’s it has simply become a ploy to extract wealth by way of the ‘Buffet investment field of thinking’. Trading and investing though difficult is not an endearing process for the overall plan of a society, but today it is the ‘only’ plan that one can have to move towards some type of wealth building vehicle for ones future.
Listed recently where the 10 largest companies and only a couple that truly create an actual product to be use for the necessities of life, well over 1/2 on the list where simply ‘the internet’ and with the speed of light are used for communicating. It has been stated recently over 60% of the information are false statements, which travel faster than the statements of truth. The bubble is not in the advancement of what so many see technically today but in just how it is use to move the sentiment of a society.
Never has been a time in human history that news could travel so fast and be so incorrect as towards the information that is stated.
A long protracted bear market in pricing could never take hold today, it simply would not be allow because ‘so many’ know and understand that the hand of ‘so few’ could move the news events of the time so easily. Bubbles are never based on valuation’s as they are just a ‘by product’ of the sentiment in trend of the day.
“Change is the only constant.”