Alas, the end of the world may not be happening just yet.
I have attached a chart here which you can print out for careful study – I think you will find it rather interesting as to steady value building for long-term investors.
It is an internal reading that Citi has created from their own trade desk. It pretty much goes along with most (if not all) of the recent bearish sentiment readings in just about every category taken.
It suggests, well, that the crowd is panic-stricken – again.
The last few days of market bounce could very well be the beginning of the end of t he “Armageddon Swoon – Summer 2015“.
I do hope for a retest but hope is not a plan.
But don’t fret just yet, this could chop back and forth for a bit – at least I hope it does – as earnings season gets into full swing right about now.
Know from earnings seasons past that chop is the name of the game.
The machines will try to guage every release and every headline report. The word “miss” in an earnings report will be an immediate sell trigger – only to be looked over later for any real facts.
So just be prepared, hold your breath – count to 5 million – and recognize it for what it is.
Tomorrow’s Headlines
With crude oil bouncing back into the 50’s it might be time to th ink of the next headlines we will be reacting to as a crowd.
While you chuckle as we read together – and should I get run over by a truck – don’t forget I told you so (not in any specific order):
Headline Topic 1 – Oil
We can be somewhat certain that once we get the bounce really going in oil prices (recall our view is a new range between $30 and $80) and say just for the sake of the point, we hit the 70’s, the new headlines will quickly forget the old. After hearing for months that low oil prices are terrible for the economy, expect this new version:
“Oil Prices Hit $70 as Pressure on Consumers to Build” or
“Retail Sales to be Clipped as Higher Gas Costs Take a Toll” or
“Weary Consumers, Already Weighed Down By Debt, Now Face Higher Fuel Costs”
Headline Topic 2 – China
Once we get a few of the “terrible” economic reports from China round tripped – the updated versions likely show a still growing economy – just not as fast as previously assumed. The headlines will shift to something like:
“New Growth Conditions in China Rekindle Inflation Fears” or
“Copper Shortage Driven by Growth Spike in China?” or
“Having Shut Down During Recession, Steel Mills to Run Out of Inventory” or
“Investigation Underway to Review Source of Previous False Slowing Reports from China”
Headline Topic 3 – The Dollar Rally
After a couple years of strength, while everyone was chatting about the multi-year bear market in the dollar, the fully expected rally pause in the dollar will bring an entirely new (read: old) set of concerns back to the front page…looking something like this:
“Dollar Rally Stalls – Traders Run To Gold” or
“Yuan to Become New Global Currency as Dollar Bear Market Resumes” or
“Schiff Tells All Dollar Rally a Bear Market Bounce – Gold to $10,000” or
“Don’t Look for Earnings Help on Trashing of Dollaras Bear Bites Back” or
“So Goes the Dollar, So Goes the United States Future”
My point to all of this?
Sad really as if these events indeed unfold, many of these type headlines will adorn websites and front pages at newstands.
We will forget that we fretted over the opposite fo r the summer swoon of 2015.
We will forget it has often been worse than now – whenver now is. We will have new things to worry about – or in truth – will they be the same ghosts from fears past, recycled in their latest rendition?
The Tough Truths
Building wealth over time – takes, well, a lot of time.
It will always be riddled with events that are very uncomfortable if we allow them to be. We will always fight the human emotional charges which will race through our brains.
We will be faced with life and death decisions painted into our minds by the media process – and it will always be hard to fight off at times.
Lastly, we will find that if we can remain patient an d stay on our path – we will arrive at most – if not all – of our goals.
If it was easy – there would be little to no gain.
If there were no risk – there would be also no return.
If it was simple – the results would be paltry.
If we leashed all the experts and the talking heads – well, it just wouldn’t be that much fun anymore.
Now…pass me the large bottle of the new tropical fruit-flavored TUMS and find me the screwdriver that opens this window out to the ledge.
More later. : )