The bull is

[Old Tusk]

Dead

[HawgWild]

Just heard that the Dow is down 1,000 points in August. If it ain't dead, it's dying.

[McKdaddy]

Just heard that the Dow is down 1,000 points in August. If it ain't dead, it's dying.

Yep, similar to a 3-wk stretch last year (9/22 open - 10/16 close) when it dropped 1,154.  Is it dead?  I don't know, but I'd welcome a correction.

[ricepig]

Yep, similar to a 3-wk stretch last year (9/22 open - 10/16 close) when it dropped 1,154.  Is it dead?  I don't know, but I'd welcome a correction.

We're working on that, down 8.5% from the top? I thought one of the talking heads said that. As my wise old uncle says, you only lose if you sell.

[LSUFan]

I been making up some losses at the roulette wheel. I'm up $1,200 in two days.

[HawgWild]

I wish the Fed would just go ahead and raise the interest rate.

[McKdaddy]

I wish the Fed would just go ahead and raise the interest rate.

Agreed.  Be transparent and bump it a quarter in Sept.

[Old Tusk]

In June I posted that I was taking risk off because I felt but the upside was very limited in relation downside risk. I started this thread because for the thirteenth time the S&P failed at the 2100 level. It clearly topped and was ready for correction. Stocks overvalued and with the decline in China they became even more overvalued. China will announce yet another stimulus program and our market will bounce. But I think you play that bounce at your own peril.

[PonderinHog]

In June I posted that I was taking risk off because I felt but the upside was very limited in relation downside risk. I started this thread because for the thirteenth time the S&P failed at the 2100 level. It clearly topped and was ready for correction. Stocks overvalued and with the decline in China they became even more overvalued. China will announce yet another stimulus program and our market will bounce. But I think you play that bounce at your own peril.

Dead cat?

[ricepig]

Dead cat?

Buying opportunities....

[Old Tusk]

I believe the correction will continue until the valuations return to mean and that would be about 1900. If anyone wants to play a bounce, fine but you are playing one that requires the Chinese government to successfully to stimulate their economy. Since 2000, debt has go from 2trillion to 28 trillion. Undoubtedly more now after the unbelievable efforts to keep their markets afloat. If you are an investor, I believe patience will be rewarded.

[ricepig]

I believe the correction will continue until the valuations return to mean and that would be about 1900. If anyone wants to play a bounce, fine but you are playing one that requires the Chinese government to successfully to stimulate their economy. Since 2000, debt has go from 2trillion to 28 trillion. Undoubtedly more now after the unbelievable efforts to keep their markets afloat. If you are an investor, I believe patience will be rewarded.

If you are an investor, you probably are still in the market. If you are a trader, then the charts say to be out at this level, or short.

[Old Tusk]

At one time I believed that an investor was strictly buy and hold. But the Fed continuously creating bubbles has made that strategy unworkable. I will leave it to you to define the difference between an investor and a trader in the Fed world.

[ricepig]

At one time I believed that an investor was strictly buy and hold. But the Fed continuously creating bubbles has made that strategy unworkable. I will leave it to you to define the difference between an investor and a trader in the Fed world.

No different now then in years past. I trade commodities, while I invest in stocks.

[Old Tusk]

I guess we don't agree that nothing has changed. I would submit that when the Fed decided that keeping the equity market up, was part of its mandate, things changed. We will have bubbles. I hadn't changed my asset since 2009. But in june, it appeared to me the market had become over valued. Later when it became apparent China was filtering, I further deducted my allocation. I feel that an investor is stupid to ride these bubbles down.

[aristotle]

I'll be watching the Shanghai open at 8ish tonight. If there is no action by the government (who may be running out of dry powder?) and their market opens markedly down, it will likely be catalyst for more of the same in US equities I think. If they take action and put a floor under this falling knife temporarily, US equities will probably bounce strongly. I'll be playing a forex proxy. Staying out of equities for the time being.

[aristotle]

I believe the correction will continue until the valuations return to mean and that would be about 1900. If anyone wants to play a bounce, fine but you are playing one that requires the Chinese government to successfully to stimulate their economy. Since 2000, debt has go from 2trillion to 28 trillion. Undoubtedly more now after the unbelievable efforts to keep their markets afloat. If you are an investor, I believe patience will be rewarded.

I agree with you. I also think the regression to the mean scenario is probable in valuations. Now that the extraneous variables of QE and (soon to be) Zero Bound have been removed from the equation. Those cast a giant skew on the graph.

[dffhogs]

I'll be watching the Shanghai open at 8ish tonight. If there is no action by the government (who may be running out of dry powder?) and their market opens markedly down, it will likely be catalyst for more of the same in US equities I think. If they take action and put a floor under this falling knife temporarily, US equities will probably bounce strongly. I'll be playing a forex proxy. Staying out of equities for the time being.

Shanghai closed 8.5% down.

[McKdaddy]

Price tends to a bit conservative in his market/economic views.  For those that are interested....

http://images.content.wmpsmktg.com/Web/AmeripriseFinancialINC/%7B23ffce5e-264c-4fb3-83a1-5a27c1fc1843%7D_Market_Brief_-_Volatility_08.24.2015.pdf

I'll post more "client approved" pieces as the various companies release them each Monday.

[PonderinHog]

Wow!  That was a rough first hour!

[McKdaddy]

Wow!  That was a rough first hour!

Ha, true.  I'm dreading what I'm guessing will be a rough afternoon-to-the-close.

[Old Tusk]

If going into close , we hold the 1910 level I'll probably stick my toe in. At least, put some in the grandkids 529's. Just looked and I'm at 8% stocks and 63% cash. Now the cash is burning a hole in my pocket. Lol

Still don't think this is the low we will see over several months.

[McKdaddy]

She's a bit of a perma-bull, but if interested.....

http://www.federatedinvestors.com/FII/marketcommentary/detail.do?cid=122535&mobile=true&mkt_tok=3RkMMJWWfF9wsRoivKnBZKXonjHpfsX77usvWbHr08Yy0EZ5VunJEUWy24UFS9Q%2FcOedCQkZHblFnVQAT62kUK0NoqIE

[McKdaddy]

Wesbury is also in the perma-bull camp (if he ever hints at market negativity I'm selling everything, ha).  If interested...

http://www.ftportfolios.com/Commentary/EconomicResearch/2015/8/24/this-correction-is-technical,-not-fundamental

[McKdaddy]

I skipped posting 6 or 7 more weekly opinions b/c it was more of the same.  The remaining ones that usually come in on Monday are usually pretty optimistic, so I may skip posting them as well.  The bond pieces will usually come across tonight and tomorrow -- I'll throw some of them on here, fwiw.

[Old Tusk]

Well, no stocks bought today. Oh well. Maybe tomorrow.

[grayhawg]

To a novice like me it looks like the bull is on life support and there is a power outage.

[Old Tusk]

It is on Fed support.

[grayhawg]

It is on Fed support.

Not surprising.

[vandybuff]

at 8pm cdt, Nikkei down 3+ percent; Shanghai just opened.

[McKdaddy]

Thoughts from LA.....

https://www.lordabbett.com/en/perspectives/marketview/china-fed-and-challenges-ahead.html?et_cid=24487695&et_rid=664924

[McKdaddy]

I'd like to post Russ' thoughts from post-close yesterday (he often times presents a balanced view on the markets, which I prefer):

http://www.blackrockblog.com/2015/08/24/finding-rubble/?utm_source=blog&utm_medium=hero&utm_campaign=hero?utm_source=rm_email&utm_medium=email&utm_campaign=egp

[Old Tusk]

A good analysis, but it raises the question what numbers do you look at to determine the state of the economy or the market.

[McKdaddy]

Wesbury's opinion of today's data...

http://www.ftportfolios.com/Commentary/EconomicResearch/2015/8/26/new-orders-for-durable-goods-rose-2.0percent-in-july

[HawgWild]

Wesbury's opinion of today's data...

http://www.ftportfolios.com/Commentary/EconomicResearch/2015/8/26/new-orders-for-durable-goods-rose-2.0percent-in-july

Thanks. That looks like good news to me.

[Old Tusk]

At least it held 1910

[HawgWild]

Janet Yellen = Roger Goodell Leadership that doesn't lead.

Raise the d@#$ rate Janet.

[Old Tusk]

In order to lead, you must know what your doing. Fed = clueless failure.

[McKdaddy]

Raise the d@#$ rate Janet.

Let's do this.

[Old Tusk]

 A recent Atlanta Fed study could not find that QE or ZIRP had helped the economy. At this point, we appear to be worried about how a minute interest might effect the carry trade. ZIRP is only about keeping the equity bubble inflated. It is time to let interest rates normalize and not some idiotic .25%.

[ricepig]

A recent Atlanta Fed study could not find that QE or ZIRP had helped the economy. At this point, we appear to be worried about how a minute interest might effect the carry trade. ZIRP is only about keeping the equity bubble inflated. It is time to let interest rates normalize and not some idiotic .25%.

I really don't understand the trepidation over a .25% rate hike. I've borrowed millions in 30 years of farming and remember rates changing often, usually the wrong way. Now, as someone who would prefer better rates on my money, let the market decide the rate.

[Old Tusk]

The problem is that there is no market pricing in either interest rates or equities.

[HawgWild]

Janet Yellen = Leadership that doesn't lead.

Raise the d@#$ rate Janet.

Earth to Janet, come in Janet. All this drama over .25%. Enough already.

[Old Tusk]

Now that we know that QE continues and ZIRP  effectively continue for years, anyone got any ideas about an investment strategy to pursue?

[JoeyCapital]

Now that we know that QE continues and ZIRP  effectively continue for years, anyone got any ideas about an investment strategy to pursue?

Long very short term bonds, short long term bonds, short US equities, long oil.

[Old Tusk]

After further review, it accurs that the none rate hike is about the currency war. The couldn't allow more strength in the dollar. Really little to do with the markets.