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How much of this volatility and profit taking could be tied to the 3rd year of a second term president's cycle?
Vs other issues like China's monetary and economic issues, the Fed's intention to raise rates and oil bottoming?
Articles in first of the year proposed historical evidence that 3rd yr of 2nd term is boosting stocks and 2nd yr of that term has worse record.
Equity markets have risen to the current levels on the back of unprecedented liquidity moves by central banks around the world. They have done little to stimulate economic growth, create jobs, nor improve the plight of the "little guy".
Other than levitating stock prices, and making the already wealthy even more wealthy, the Quantitative Easing programs have had little tangible effect.
There are two schools of thought regarding whither equity prices from here:
1>) The Fed (and other Central Banks) will find new ways to create liquidity, and stock prices might continue their unprecedented rally.
2>) The market already knows what Central Bank printing produces, and even if there is more it , or it ceases/winds down, the reality of our economic condition may well set in and markets will continue to slide lower.
The "smart" professionals (NOT the knuckleheads on CNBC) believe we are at the beginning of a nasty bear market. What we have seen this week is just a little taste of the meal to come. You can cite China, Iran, Ukraine, Washington, Federal Deficits, the Fed, Korea, ISIS and a host of "known" issues which have not mattered...until now perhaps.
The bottom line is that there are plenty of reasons why the market 'could' sell off. These reasons have been around for some time. Sentiment...i.e., what matters, can change on a dime in the stock market. They don't ring a bell, and they don't make an announcement. A bear market wears you down: both bulls and bears, and is VERY hard to trade.
IF you are concerned, OP, now is a good time to become a little more defensive. There is never anything wrong with taking a profit, or cutting a loss and living to fight again another day. The worst thing you can do sometimes, if you are concerned, is to do nothing, and then look back with the "could have/should have". Once the money is gone, it is gone. Best to take steps to preserve what you have if you are nervous. If you believe all will resolve positively, and are comfortable if that turns out to be a bad assumption, then sit tight.
I can tell you that I run a short portfolio. I am always short, on balance. A few weeks ago I lifted the hedge, and luckily the markets came my way (down). On Tuesday afternoons puke (note we did NOT make new lows on Tuesday) I hedged once again, and took that hedge off again today into the rally, so that I am net short again. I expect tomorrow to be a nasty day, and many days ahead to be down days. If I am wrong......and I always assume I am/will be so as to protect my capital, I will hedge once again....and most importantly, live to fight again another day.
The "smart" professionals (NOT the knuckleheads on CNBC) believe we are at the beginning of a nasty bear market. What we have seen this week is just a little taste of the meal to come. You can cite China, Iran, Ukraine, Washington, Federal Deficits, the Fed, Korea, ISIS and a host of "known" issues which have not mattered...until now perhaps.
Nice post, Ted Bear.
Who are these "smart" professionals you're referring to?
September is a bad month for stocks, or so the history would tell us. But then again, the dip/correction seemed to occur early this year in August. So who really knows? Wall Street's been bouncing up and down like in a pogo stick.
September is a bad month for stocks, or so the history would tell us. But then again, the dip/correction seemed to occur early this year in August. So who really knows? Wall Street's been bouncing up and down like in a pogo stick.
I think the rollercoaster ride will continue
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