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How the Market Works

This is NOT a Bull Market: How the Market Works

Posted by kdadmin on April 19th, 2016.

This is NOT a Bull Market:  How the Market Works

Just to be CLEAR, we are NOT in a Bull Market.

I can’t tell you the number of times that, right now, at the plateauing end of an overpriced stock market, that all the hucksters come out of the woodwork promising great returns to all who venture into the Do-It-Yourself investment club.

They’re called Snake Oil Salesmen for a reason …

This is NOT a Bull Market.

Look at the chart above. Notice how SPY‘s performance line slopes DOWN from last May’s high, through all the wreckage, to today? Down means down. In other words, in spite of all the rhetoric, all the word smithing, and all the B3 (blah, blah, blah) of market pundits, the market is still down off its high last year. With P/E ratios in the mid twenties, any further significant upside is just grasping at straws.

Not sure you believe me? Get a ten year perspective in my recent article, “Extra Cautious” is Not Good: How the Market Works.

Look out Below!

Just now, when the market recovers from a spate of bad luck, just when it goes sideways for a year, just when there is some purposed “good news” that is really nothing more than the wrap up of old news, just now, everybody becomes a “stock market guru.”

And it’s just now that those of us in the business lick our chops.

You see, it’s these uninformed ilk that will drive prices up to moronic levels, reducing our costs to short the stock market, be it directly or with an inverse asset class. Just when it seems “you can’t lose,” we’ll bet on a loss. Frankly, we can’t wait. We’re like the sharks near Seal Island, South Africa. Just when a lazy seal thinks it’s safe to go back in the water, BAM! We’ll pick them off from below. Bwahahahaha.

I love my job.

p.s. Stay out of the water.


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