Rallies are so 2008. Forget about rallies. There will be no more rallies. The jack will no longer pop out of the box and flop around like a flaming moron. The spring will not get wound tight enough anymore. Why not? Because the child is tired of playing with the toy. He will not expend the energy necessary to push the jack back down into the box. He is either depressed and in need of medication, or off playing with other toys such as gold.
Steven M. Sears plaintively cried out for an answer to the Vix conundrum in Barron’s:
“Even though the VIX is at an extremely elevated level, it is still far below last year’s intraday high of 89.53, even though the stock market is falling through last year’s low. It isn’t clear that anyone has a really good answer why, and this just makes people more nervous.”
If you have been foreclosed upon and kicked out of your house, do you still need homeowner’s insurance? No. If you have sold all your stocks and gone into treasuries or gold, do you need to buy put options on stocks? No. If you are a value investor with a years-long time horizon, do you buy puts on your stocks? No. If you are grimly holding onto stocks that are practically worthless, shaking your fist at the market and shouting: “I’ll see you in hell bear market!” do you need to buy puts to protect your stocks from becoming more worthless? No, you don’t have any money to buy puts.
A few days ago in the comments, I said that I thought we were heading into a long apathy phase of this bear market. And I’m thinking that investor apathy toward stocks translates into relatively lower levels for the Vix.
Of course, I’m exaggerating when I say there will be no more rallies. But you see what I’m getting at right? Last year’s March-to-May rally actually got up above the 200-day moving average. Remember that? They just don’t make rallies like that any more.
Back in my day, in 2008, we had to rally up hill both ways in the snow, for WEEKS at a time. I remember back in the great rally of 08, the one you mention, we rallied for a good 2 months. Can you believe it? Weeks? Months? Of up?!?! It’s astonishingly quaint, looking back.
Another possible answer is the 6 handle PUT. It is free, no premium, the bulls just dare the bears to PUT a foot in that trap.
While I agree we should see little in the way of rallies based on fundamentals, this short has been too easy. I suspect a short’n ain’t easy rally soon. I don’t see a big rally, I believe the ‘Gap of Doom’ will not be entirely filled.
Due credit to Jeff Macke for the “short’n ain’t easy” quote from a few weeks back.
Maybe I am just biased as I am in cash as of today. Nothing to play except HOPE for a rally.
hmm this goes in line with our thinking
http://www.stocktock.com/2009/02/23/charts-call-for-more-downside-in-the-weeks-ahead/
“The jack will no longer pop out of the box and flop around like a flaming moron.”
I take offense to this!!
AHAHHA well just like Hank you can call yourself “Box”
by the way if i knew SKF was at 175 in the early morning i would have made another $200 LOL oh well school first
Nikkei at 1982 levels.
Okay, subwave 3 of 5 of (3) [or 3 of (5)] has five component waves: Waves 1 and 2 are done and gone. It looks to be that we are on wave 3 (of 3 of 5 of (3)). A 1.618 Fib extension of subwave 1 of 3 gets us down to 730.59. A 1.5 Fib extension lands us at 738. (There will be fear if we get a 2.618 extension.) We will have some bounce called subwave 4, then more down action, likely to the 6 handles based on subwave 1 of 5 (unless truncation occurs or the wave counts are wrong).
Tomorrow will be interesting.
I’m hoping to see a massive rally today in order to go short. Obama’s speech tonight is bound to crash the market tomorrow.