WASHINGTON, February 12, 2013 – We’ve achieved a harmonic convergence of sorts today, and our overextended stock markets will have to digest them all. First of all, it’s Fat Tuesday today, which means that investors and party animals ranging from New Orleans (of course), Biloxi, and Mobile to Rio de Janeiro will be getting their fill today of alcohol, beads, and scantily clad female pulchritude, not to mention the predictable morning hangover of future court dates for many revelers.
Second, the rigged results of this year’s Super Bowl Market Indicator may be generating overconfidence on the part of traders, investors, and analysts who expect this year’s stock market party to march on unabated through December 31.
But third, this oversupply of animal spirits may be set to collide with the Chinese Year of the Snake which commenced somewhat quietly this past Sunday. (Our non-Communist Take on the Snake appears above.) The Chinese themselves seem rather uncomfortable with this particular astrological year, and some dark-minded market pundits are gloomily reminding us that the last Year of the Snake—2001—brought us You Know What which, among other things, brought down New York City’s twin symbols of American Capitalism Triumphant.
What does the Maven make of this unlikely and uneven example of fiscal harmonic convergence? Let’s take the indicators/symbols one at a time.
Regarding Mardi Gras, we’ve already noted that in one way, shape, or form, the Big Party always comes to an end. (Heck, even Pope Benedict decided to bail just prior to Lent.) While some revelers in New Orleans keep imbibing through Ash Wednesday and beyond, even they will end up—some very prematurely—in one of the area’s floating graves sooner rather than later, burnt out by an almost biblical excess of hedonism.
That’s also the usual fate of Wall Street’s permabulls and permabears, even though a few of the most prudent extremist predictors quietly fail to take much of their own advice most of the time. In any event, no party goes on forever, and Wall Street’s current dalliance with QE giddiness is set for at least an unpleasant pause. Their predictable morning hangover may very well occur directly following The One’s State of the Union Address this evening when it dawns even on Democrats that there’s no Hope their guy will ever Change.
Regarding that Super Bowl Indicator—those already familiar with its remarkable but not perfect record for predicting up and down years in the market knew the fix was in before this year’s game was even played. For the uninitiated, the Super Bowl Indicator works this way: if, in any given year, a current NFC team or an old NFL team wins the Super Bowl, the market will gain on the year—specifically, closing averages on December 31 (or the last trading day of the year) will be higher than they were during the previous trading year.
Hence, this year’s rigged game. The 49ers are both an old and a current NFC team. The Ravens are slightly more complicated, given that they were actually the Cleveland Browns, stolen from that hapless city just like Baltimore’s own Colts were stolen from Charm City and packed off to Indianapolis.
The original Jim Brown Brownies were an old NFL team that agreed to become part of the AFC to balance the conferences when the NFL and AFL merged back in the day. Thus, the Browns were an authentic “old NFL” team. Arguably, moving that franchise to Baltimore, reprehensible as it was, didn’t change the “old NFL” status of the Browns, even though they were renamed the Ravens, even as denizens of the Browns’ famed Dog Pound shouted “Nevermore!” at the top of their lungs.
Thus, for your average market maven, no matter who won this year’s Super Bowl, 2013 was guaranteed by the Super Bowl Market Indicator, to be at least a moderately banner year. Historically, the indicator works roughly 2/3 of the time, so we’ll see if percentages improve a notch this year or not.
Which brings us to the really important thing here, Chinese astrology, i.e., The Year of the Snake, which is now upon us. Even the Chinese seem to dislike and even fear the negative feng sui force generated by this particular symbol, which results in vastly less Google search hits than any other astrological year.
According to our friends at France 24 (AFP, which is already celebrating the Year of the Frog over in Paris), “A stock market slide, escalated conflict between Japan and China and more Gangnam-styled success for South Korean singer Psy will shape the incoming Year of the Snake, say Asian soothsayers.” (Hat tip to ETF Digest for this link.)
As if that’s not ominous enough, “the fortune tellers warn that the “black water snake” that emerges to replace it on February 10 — the first day of the Lunar New Year — could be a venomous one that brings disaster.”
Don’t believe it? These sages have far better sourcing that that provided by Western “global warming” hoaxsters for their opinion-based “scientific research.” “Previous Snake years have been marked by the September 11, 2001 terror strikes that killed nearly 3,000 people, the crushing of the 1989 Tiananmen pro-democracy protests and the Japanese attack on Pearl Harbor in 1941… The 1929 stock market plunge that heralded the Great Depression also occurred in a snake year.”
Still need more convincing? “Hong Kong’s celebrity feng shui master Mak Ling-ling predicts the stock markets will enjoy a smooth first-half before becoming turbulent in the second half of the year, which she links to the characteristics of the reptile. ‘It’s just like the movement of snakes — fast, aggressive and sharp, but cunning and tricky at the same time…’”
Lest we imagine that Mak Ling-ling is infallible, she noted during her interview “that President Barack Obama needed to ‘be less conservative’ in his attempts to revive the economy.” Well, maybe we are misunderstanding what she means by “conservative.”
At any rate, her main view, according to AFP, is supported by a Singaporian soothsayer, Grand Master Tan Khoon Yong who thinks the European Union may “split” by some time in May. “This is a disaster year… a lot of things will not go smoothly,” he warns.
Supporting the May time-frame, Chinese astrologers in general note, reports AFP, that “this year’s snake is identified with the element of water—symbolising fear—that sits on top of the fire element, representing joy and optimism,” predicting that “conflict between the two will bring turbulence in May.
With reference to 2001, 2013 is already shaping up nicely. The Syrians, with ample help from the Iranians along with U.S. fecklessness and lack of foresight, are keeping the Middle East’s powder keg boiling away. Al Qaeda, or whatever in Hades this collective of fascist murderers currently calls itself, has commandeered the Sahara Desert, not to mention the once optimistic Arab Spring, causing more murder, mayhem, and instability.
Meanwhile, those sly, slap-happy North Koreans appear to have set off yet another subterranean nuclear blast of substantial proportions both to prove that their current Gen 3 Dear Leader iteration has genuine cohones and to terrify the West (read the U.S. taxpayers) into buying food for that country’s starving populace so that their government can continue to develop offensive weapons and missiles with their own money.
What we should really give these murderous kleptocrats (or their computer systems) is a current-generation edition (2.0) of the Stuxnet worm that not only screws up their offensive military research machine but also generates a democratic revolution via remote control from Centcom. But anything that defends America’s international interests won’t happen under this administration, which doubtless sympathizes with North Korea’s understandable fear of U.S. Imperialism and Colonial Adventurism.
Or maybe we could persuade current pop-culture hero Psy to mount a rap campaign against the Bad Koreans. This would be a real case of Psy Ops. No? Well, you can’t blame us for trying.
So anyhow, let’s put this together. All parties end. The Super Bowl says bull market. And our Chinese prognosticators seem to be summing up the conflicting results by saying: “Sell in May and go away!” Now where have we heard that one before?
Given that State of the Union tonight and the fact that the only way our current unrepresentative Government will cut taxes if via mandatory sequesters that they were never serious about when they passed them, maybe some of the February selling we’ve been doing will pre-empt our getting caught in some mass-exodus in May when it will likely be too late.
We’re not sure if the Super Bowl Indicator will come back and nip that Snake later in the year. But right now, this is a day-to-day, week-to-week market. Persistently high oil and gasoline prices in the face of a continuing glut should be telling us something, too, so perhaps we should pay attention, pare down to a few of our swell utilities, MLPs, and REITs, and lay low in the weeds while we await some kind of Götterdämmerung. It likely won’t be over ‘til the Fat Lady sings.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any ar500ticle under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
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