Since it has all been said (more than once) and thoroughly documented (here, and in countless other places), this weekend I'll simply leave you with an updated chart of the SPX (originally posted a few weeks back) that serves as a fine guide (one of many) for the spectacle unfolding before our eyes.
As we move towards ever increasing inversions of good judgment and common sense - something that always happens when markets move towards their greed/fear extremes - I thought some philosophical waxing might be an entertaining sidelight, and perhaps even an enlightening extra. In this bad is good, and good is bad world in which we currently find ourselves, one of the many upside-down equations we currently have before us has to do with the popular conception of who and what the bulls and bears are. Granted, the popular conception of bears being pessimists and bulls being optimists is not new by any means, but what is new is the degree to which the exaggerations have been taken, with the bears being demonized and the bulls being sanctified in recent years.
Since 2009, whenever things have gotten a little dicey for the bulls, the bears have been referred to as evil short sellers, or nasty short term 'speculators', and blamed for everything that's wrong with the global equity markets and the global economy. That's what the official party line has continually been telling us anyway, along with the urgent need for these 'heralds of negativism' to be treated as a plague and purged from the markets as quickly and efficiently as possible.
Of course, in this black is white, and white is black world, those horrible short sellers are not really all that "evil". I would even go so far as to say that they are not all that negative either, and that it might be more balanced to call them realists. In fact, again, in this world turned upside-down, I would argue that the bears are really the only sensible, rational, and reasonable people left. Unlike what the myth makers would have us believe, the bears are bears not because they are wishing ill on their fellow human beings, but because of what they see in the data (undoubtedly in their interpretation of the data, but since we have pretty good independent confirmation of that data analysis in the bulls' inability to rationally counter argue, and, more so, in their indirectly recognizing the bearish analysis as valid when using it as their very justification for QE, I think we can count that data interpretation as good and valid). In fact, what those evil bears propose as being the best long term option for local and global economies - namely, the elimination of excess and unsustainable debt - is, in fact, the best option for most of the world's population. Now, is that really so evil?
Yes, that's right, I would argue just the opposite of the party line, and propose that our real friends are the bears, and that those doing the most harm to local and global economies are the so-called 'optimists', or the bulls, as they're better known, and prefer to call themselves. And we don't need grand diatribes expounding the case - all we need to do is to honestly reflect just a bit on the information we all have at our disposal: things like which small percentage of the population has benefited the most from QE, and which large part of the population has suffered the most. The case is so blatantly evident that I risk insulting the reader's intelligence with unnecessary supporting arguments.
Think about it for a moment. Who are the proponents of "kicking the can"? Who are the critics? Who is really thinking in terms of the common good? And who isn't?
Where do you stand in this deranged world of bad is good, and good is bad?
We all know full well exactly what's going on, and we all have to make our own decisions with respect to where we stand. Do you know who you are? Or have you capsized? This bull-bear mini-expose is an emblematic example that does no more than scratch the surface and ultimately lead us to the more difficult questions we have before us - questions like: do you still have a valid 'baseline' from which to start your analysis to begin with?
In this subverted world of ours, where everything is turned inside-out and put out of order, have you been duped into becoming nothing more than a glib short term supporter of Fed ponzi profit scamming? Worse yet, a long term believer? Or are you still a member and friend of the middle class? Are you at least still able to recognize reality for what it is? Who knows, maybe you might answer 'yes' after all and even accidentally lock in some profits as a byproduct of this year end waxing philosophical! (I'll bet more than a couple of those short term Fed crony bulls are already doing so - and not for having read this, mind you - while they tell the rest of us the trend is still up, of course.)
SPX Double Exhaustion Wedge, Sornette Bubble, Epic Trendline, Etc. Update (first posted here)
I'd be terribly remiss if I didn't also recommend visiting John Hampson's SolarCycles site for a perusal of his most recent posts. Absolutely phenomenal work:
US Stock Market Top
More Red Flags
2014 For Equities
Major Stock Market Top Right Ahead
And there's more there if you're still looking for 'more evidence'. He's been pumping out some great analysis for a long while now!
And, in this, just out from our other John, Hussman that is, we've got another one of his unequaled Weekly Market Comments:
Estimating the Risk of a Market Crash
"My guess is that the present speculative advance may have a few percent to run - I'll be particularly concerned if the market does so in a rapid, uncorrected manner in the next couple of weeks, which could suggest crash probabilities approaching 100% based on the sort of analysis above."
Here's to the survivors, and to not looking like an idiot! (In these circumstances, it's always better to be early than late though, IMHO.)
