Monday, June 8, 2015

Three charts for the US, and another one that matters more


$VIX:


Is that just put-buying to cover for summer vacation? Or is there really a building fear due to an imminent OMG 0.25% rate increase?

$TRAN:


That just looks horrible, and the turn-around at the Bollinger mean last week suggests more downside to come.

I guess goods aren't going to be transported across the US anymore.

$SOX:


Well that's a failed breakout if ever I saw one. Too bad for the bozo who invests based on semis, eh?

The problem in the past couple weeks was there were so many divergences in the US market across various sectors that it looked like we were either setting up for a new upleg or setting up for a new downleg, depending on which chart you looked at.

I guess with all the clowns demanding a 10% correction (and we already had one in September 2014, if you remember America was going to be exterminated by Ebola), the market is being pushed into giving us one.

Oh well. Personally, when it comes to the US, I prefer looking at this chart:




What that green line says is, for those of you who can't do math, since the early 1930s the US stock market has grown about 7.4% per year. Faster in secular bull markets, not at all in secular bear markets.

BTW, the reason I choose the early 30s is not to cherry-pick. Actually, the 30s depression saw the beginning of modern economic data collection (e.g. part of the problem back then had been the US didn't even have the foggiest idea what its own GDP was, FFS) and the first attempts at modern macroeconomic theory.

Fed policy since then has eliminated the possibility of bullshit markets like the late 19th century. Plus of course the US became the pre-eminent economy of the world.

So the US, longer term, makes you over 7% per year. Kinda a slam dunk, long term, eh?

So quit piddling your frilly pink panties, Whitey.


No comments:

Post a Comment