As everyone focuses on the Olympics (and the South Korean President Moon’s apparent acceptance of an invitation to visit Pyongyang soon to meet with Little Rocket Man); perhaps one should watch Sec’y of State Tillerson’s visit to the Middle East this coming week; nobody noticing. At this point let’s focus more directly on the stock market which has many if not gloomy, almost universally convinced it’s just a dip along the way (of course they’re generally a crowd that didn’t agree the market would get to the moon if Trump won; and chased it higher later in the game). 

For some time I had circled the areas around 2300 +/- for the S&P, as a ‘reasonable’ area we should ultimately be headed to. Traders focused on Moving Averages perhaps rightly identify battlegrounds; but miss the underlying reality that (so far and especially on the first break and rally that ensued) liquidations will break supports; and those attempting very classic efforts to ‘buy dips and sell rallies’; actually had to move at nearly the speed of light; because moves were ‘textbook’, but incredibly swift.

As noted after visiting the ‘Money Show’ (only briefly) the other day; the mood was glum but ‘resigned’ toward an overdue setback for stocks. As far as I could tell, everyone (though not proactive like we were ahead of the crash) was describing this as a normal and healthy (if fast) market ‘correction’; nobody was calling it a bear market; and more importantly none were advocating selling anything; but holding on, since it can’t be expected to continue.

Well, not at the pace we’ve seen; but how to they know that? They don’t. I like to say ‘let the market tell us when it’s done going down’. We have shared a couple ‘possible’ ways that could happen: a truly dramatic ‘V’ bottom (not seen yet); or a period of hammering on a ‘base’ (also not at all constructed as yet). Or maybe some dramatic intervention or ‘PPT’ (Plunge Protection Team) Fed move.