A MESSAGE TO TECHNICIANS: YOU CAN PULL YOUR PANTS UP, YOUR PENIS IS NOT ON FIRE
With all the bearish headlines and panicked technicians out there you would think the markets hit a 52 week low today. In fact, we haven't crossed a 5 day low on the S&P and Nasdaq. Yet anyone with access to a chart is in full blown panic mode. Welcome to the post-2008 stock market.
Today's move down changes nothing. The obvious truth is that for the past several months we have been in a consolidation phase for the general markets. We are drifting sideways. The positive takeaway is that we're drifting sideways just a touch below the highs. All the meanwhile, whenever we fall by more than 2% news headlines of depression begin flashing. Survey results that show 50% of Americans will never invest in stocks again begin scrolling across my news feed. And the chartists out there (in other words...everybody) begin dropping their pants and running around like their penis is on fire.
Such mass panic that comes along so rapidly causes shallow pullbacks that are retraced more quickly than most market participants anticipate. It has happened time and time again since the 2009 lows and I see no reason why it is going to change anytime soon.
In the meantime, if you are looking at a chart and it is proving a frightening sight, do keep in mind: The same monster that has you jumping out of your long positions is doing the same thing to everybody else. And in the markets, just like in a public restroom, the less company you have the more comfort you should feel.
