Friday head fake on Wall Street as Dow stocks tank for 5th day in a row
WASHINGTON – For a moment Friday morning, it appeared that Mr Market might actually bring himself to gift the badly gored stock market bulls with an up day. Indeed, Friday morning’s open bell found all three averages nesting comfortably in the green zone. But this was only a bullish Friday head fake. Only this, and nothing more. The smiley faces quickly faded, as bulls watched Dow Jones Industrial (DJI) stocks tank for the fifth miserable day in a row.
In addition to those much put-upon Dow stocks, many stocks in the tech-heavy NASDAQ tanked as well. Selling only worsened after news that Apple’s (NASDAQ:AAPL) gated and well-guarded App Store would have to play at least a little fairer with the app providers selling their products through this portal. The broader-based S&P 500 was also down, and only marginally less so than the Dow.
ZeroHedge provides us with a bit more color on that brief Friday head fake
“The S&P just suffered its worst week since mid-June…Small Caps were the biggest losers this week. Nasdaq was the least bad horse in the glue factory…
“Every dip that was bought this week was met with more selling… that is NOT what the doctor ordered!! Everything looked great overnight but the cash equity open saw the selling begin and barely stop and the close was really ugly…”
And ugly it was. As the bullish Friday head fake faded and as the subsequent decline wore on, buyers disappeared. All three averages sank faster and faster, fading on modest volume. The the DJI logged its fifth consecutive day of red ink, closing off 271.66 point for a loss of -0.78%. Not horrible by market standards. But pretty awful, given that we haven’t seen a green glimmer in this index of Dow stocks since late last week. This is exactly the kind of nasty action I was worrying about in Thursday’s market report.
Our September stock dump-a-thon continues. Reluctantly…
We continued to dump likely losers in our portfolio Friday, reluctantly transforming paper losses into real ones. We also acquired a small lot of shares in the 2x S&P Bear ETF, trading under the symbol I still get a kick out of: SDS. AKA the ProShares UltraShort S&P 5oo. (NYSE:SDS)
I suspect we’re not entering a Biden Bear Market just yet. But yesterday’s clearly unconstitutional “Covid Vax Mandate” fiasco soured the political mood. That occurred via Biden’s nasty address on the topic. During that ghostwritten disaster, our, ahem, duly elected Conciliator-in-Chief essentially offered to rip out a new orifice for anyone moronic enough to disagree with his Junta’s latest exercise in unconstitutional fascism. There’s real American leadership for you.
This stupefyingly out-of-touch bit of Washington, D.C. kabuki didn’t help Wall Street Friday. Hence, our subsequent Friday head fake. Almost predictably, this about-face morphed into yet another stock market rout. But Biden’s “conciliatory” threats against Delta Variant Deniers did, at least momentarily, distract nearly everyone from the still unfolding Afghanistan debacle. That continually worsening debacle was, at the very least, partially the reason Slow Joe’s handlers decided on another round of gaslighting. That’s why his snotty “vaccine mandate address” was carefully choreographed and aimed at pissing on those GOP / Trump voters that Biden’s ruinous US border debacle intends to replace. Along with those equally useless, old-line moderate Democrat voters who, apparently, thought a gracious, level-headed Biden would be a more acceptable replacement as president than that awful Orange Man.
Markets continue to react more to real or perceived politics than to traditional measures of performance
As I’ve mentioned many times here before, it’s always been my intent in these columns to offer a market narrative to our readers that even includes some of my own investing victories and blunders. Unfortunately, my old investment toolkit, which involves traditional techniques like technical analysis (charting) and fundamental analysis (including trivial things like corporate profits and losses) has been sorely stretched ever since the Great Recession smacked investors upside the head, leading to the disastrous Obama presidency. I’m still doing better than average here, but August, and now September are quickly ridding me of any hubristic tendencies I might have developed earlier this year.
Recent history. After a brief interregnum in our Obamanation’s “fundamental transformation” era, during which the surprise presidency of Donald Trump dug us out of our economic slough of despond in record time, our friends the Chi-coms, either accidentally or on purpose unleashed the Wuhan flu on an unsuspecting world. Funny thing. This was just in time to derail The Donald’s flat-out guaranteed landslide victory in Election 2020. (Actually, the WuFlu didn’t derail that landslide at all. But we won’t get into that here.)
A coincidence? As the Discovery Channel’s popular real life (retired) detective Joe Kenda often stated during his long-running series, “There are no coincidences.”
The uncertainty continues on Wall Street. But no one really knows what happens next
Bottom line. The nation has been roiled with the most vicious kind of politics since Obama the Odious was elected to the presidential throne. Obama and his Marxist Minions quickly set out to destroy the next president and our country. Having inadequately prepared to throw Election 2016 — which, of course, was supposed to be a 95% landslide victory for Her Hillariness — they quickly regrouped.
Everything their fevered Marxist / Globalist brains could think of to oust Trump utterly failed. To compensate, America’s Socialist Party did everything they could for four long years to derail a presidency that had much of the middle class bursting with joy. (Considerably helped, BTW, by the GOP’s intransigent, do-nothing RINOs.)
Today, we know what they did. And now, with their dementia-addled, mentally disabled placeholder of a “president” in the Oval Office, these vengeful clowns fully intend to complete at least the virtual third term of Obama as they continue to operate the ghost of Joe Biden by remote control. We are in trouble. Dow stocks are in trouble. Actually, all stocks are in trouble.
Which brings us back to the market. It, too, is in trouble. Today’s Friday head fake offered yet more proof. Today, fundamental analysis and technical analysis have inexorably taken a back seat to political analysis. Rather than poring over charts and P&L statements as they should, investors now leave these aside. Now they resort to reading the political tea leaves. It’s their latest attempt to discover which incoming and stupid Washington policies will haunt their portfolios next.