Markets Slide

Markets continue to slide as the retracement of the bull run evolves and the 2008 trading pattern takes hold.  October will be the battle ground to determine if equities accelerate towards a low correction bottom in the first quarter of 2016, or are able to stabilize within the -20% to -25% pull back zone.

Fed Basically Admits It Is Afraid To Stop

Fed action basically admits it is harder to sustain any asset value now and will need negative interest rates to keep the economy afloat. The greatest bubble in modern times may have gotten new life as Yellen cannot stop the life line to equities.  Keeping it all in the air may be difficult as there is little the Fed can do to cure a panic.  

Fed Day

Whether the markets explode higher, crashes lower, or just lays an egg in the next few hours, alternative strategist should have already banked more than enough return this year to easily handle any volatility.   Buy side investment bias is the trading opportunity gift which keeps on giving and is based on bizarre notions of market efficiency and macro trend expertise.  Successful alternative strategies execute a in probability game where positive outcomes are not dependent on a bull market or a Fed which has helped float an industry based on a faulty decision bias.

September Rate Hike and Government Shutdown

September, the month where the Fed raises interest rates and the markets get a government shutdown.
So if neither happen the markets still have to deal with trading and investment fatigue where there is more downside than upside for the first time in six years.  A 14.2% break in the S&P500 since May of this year leaves plenty of room for more down.  A minimum  20% correction is indicated by decision models.

Market Bears Still Have The Edge

Fed should raise rates this week as it will make no difference whatsoever to the world economic order.  Markets do not need anymore protection than they receive everyday from sovereigns and normal central bank interventions.  China is a fraud but what's new.  It is an overplayed card.  Markets could withstand another eight to fifteen percent break just on normal retracement action.  We still have the 2008 downside pattern intact which would lead to a terrible October.  

How Eight Stocks Are Doing YTD

	AAPL	BAC	GOOG	GS	IBM	MSFT	F	PFE
Shares	181	1118	38	103	125	431	1290	642
on20000	-29	-2418	2985	-1000	-2062	-1856	-2284	398	-6266
									-3.92%

Fools

Markets rebound as happy central bankers do what they can to remove corrections from the world financial instruments.  The world loves up and the thoughtless fools who own stock are happy again.  Life is good and down is bad.   Fools are happy and usually own stock.

Slow Death Ahead for Buy and Hold

Heard many stories today how people bought the break and made money.  Every financial adviser telling people to stay the course and think long term.

Well, it is not the hard breaks that kill the most, it is the death by a thousand cuts for the buyers.  This hard break may be the the arrow pointing to future long term direction.

Market Loses Again

No rescue from Fed speak although I am sure they are watching.  The Fed has begun the weaning whether intentional or not so the markets are running all over their ranges to find a place where it does not hurt.  Interest rates are plummeting again and here we are.  Short covering rallies are as vicious as the breaks and there is whole bunch of potential chatter overnight that could send markets sharply higher or lower.  The 2008 pattern remains and we have actually surpassed the decline from top to bottom as we have moved -14.24% against -12.5% decline in 2008 in the May 19th to August 24 time period.

Long Luggers

Today's action was just what the long lugging, long term, reckless investor deserves.  I cannot tell you how many individuals owning stock either on their own advice or by listening to their financial advisor are guilty of planning a long term just hold and rotate long stock portfolio where years of hiding get crushed in a single quarter.  This passive approach is a from a world view sadly dependent on all being sweet,and where one believes they can continue to win by picking door number one.  That math doesn't work.   Wise up.  

AAPL has had a lousy spell here.  They have all the money in the world but so what.  They have skilled competitors and the law of substitution is starting to catch up.   Love me forever in trading and investing ends up looking awful on the P&L.