A couple of sidebars worth mentioning. As the seasonal change point can be one of the key pivotal turns of the year, this can’t be good for the incumbent trying to get another 4 years. A loose estimate suggests that the President needs to see the market bottom 60 days before the election to have a chance. Think about this, even with a VIX near 18 the newsfeed is mostly negative from one day to the next. If it’s not Facebook, it’s JP Morgan. If not Morgan its Greece. If not Greece its Spain. If not Spain it’s the unemployment rate or the fact that Congress shows little interest in doing anything. If not Congress it’s the Fed pushing on a string. If it’s not that, then we can talk about the new perceived Islamic threat in Egypt which may or may not choose to turn back the clock on Israel to the days before the Camp David Accord. With all this bad news, why won’t the markets bottom? Simply put the intermediate term trading sentiment does not match the long term gloom. With a newsfeed like this, imagine what fear levels would be like and what news event might materialize to actually get the VIX up to 30. To be honest with you, I don’t even want to think about it. But unfortunately we probably have to find out in order to get a true market bottom. I’m only the messenger and would much rather write something bullish.
My goal next week is to have some good news for you. Maybe the Dollar will be repelled at the megaphone. It would be nice.
Click chart to enlarge