Bear Vs Bull: Who is winning?
Right now, neither of them. Like us they are both bored out of their minds and just about given up on the whole sorry business!
This has been the most frustrating and irritating 6 months on the market that I can remember. But, we have to deal with it, so let’s have a look at the chart.
The last 2 days have been awful, down from 410, to 390.But what else can we notice? Firstly, that we are now almost exactly on the lowest close so far – will this prove to be support? Or will it drop right through? Obviously, we don’t know, no one does, but there is one possible clue: the volume. It was the highest for some weeks, and similar to 20th May and 12th May which both signaled change of direction, albeit somewhat short lived.
Stock markets stop going down when everyone has given up – ‘capitulation’, which is when anyone who is going to sell has sold and there is no-one left to sell. It is typically indicated by high volumes.
Is that what is happening here? Maybe. Maybe not.
Consumer Confidence At 40 Year Low
The news is universally dismal, consumer sentiment is the lowest for over 40 years (see chart), lower than during the GFC! Contrarians are always looking for the times of no hope, because once they are reached things start to get better. Maybe it is time for a reversal. Let’s hope so.
Personally I can’t see things suddenly turning round in the short term, not until the midterm elections. On the other hand, there is a stock market saying ‘buy on rumor, sell on fact’, so if that is the case then we may see a rise before November.
Right now we can just be grateful that thanks to the ITM OUT signal we are on the sidelines and not being impacted. Just watching with fascination tinged with frustration and boredom.
Hopefully by the net blog post we will have some sense of direction.
Still The World Turns.
I have been in France for almost a month now and realize that the stock market is not even on the radar here. From my observations the French are very absorbed in French affairs and seem not that interested in the rest of the world. Obviously, that is an outsider’s point of view, gained from French radio stations and newspapers, but it is a good reminder to me that there is a whole world out there that really doesn’t care about what I take very seriously and spend a lot of time thinking about.
I am writing this from a lovely chateau, Artigny, and yes that is my laptop on that table! It was built around 1920 by the then richest man in the world, Francois Coty, the perfume and makeup entrepreneur. After spending enormous amounts of money on this chateau, using only the best of everything, he lost all his money in 1929 and then died in 1934. The chateau lay derelict for 25 years, until 1960 when it was totally restored and turned into a hotel. Below is an image of the south side, and as you can see it is impressive and beautiful – and an appropriate reminder that all things pass!
