Today Wipes Out All Gains For 2012 Markets

[Kathianne]

http://www.marketwatch.com/story/dow-average-loses-gains-for-2012-2012-06-01?siteid=yhoof2




June 1, 2012, 10:24 a.m. EDT
Dow average loses gains for 2012


SAN FRANCISCO (MarketWatch) -- The Dow Jones Industrial Average /quotes/zigman/627449 DJIA -1.76% (http://www.marketwatch.com/investing/index/DJIA?link=MW_story_quote) slid into a loss for the year after a low rate of U.S. jobs growth, following weak Europe and Chinese manufacturing data, took nearly 200 points off the index. The blue-chip average is now down 0.1% for the year. As of Friday midmorning, it's down 185 points to 12,207.99. The S&P 500 /quotes/zigman/3870025 SPX -1.95% (http://www.marketwatch.com/investing/index/SPX?link=MW_story_quote) , off 1.6% for the session, is still up 2.5% for 2012. The Nasdaq Composite /quotes/zigman/123127 COMP -2.12% (http://www.marketwatch.com/investing/index/COMP?link=MW_story_quote) , down 1.7% Friday, is up 6.6% for the year.



Right now:

Dow Jones Industrial Average (^DJI) -DJI

12,174.65 http://l.yimg.com/a/i/us/fi/03rd/down_r.gif 218.80(1.77%) 11:16AM EDT

[fj1200]

If we're complaining about 220 points wiping out the gains for almost half a year, we're not missing much.

[Thunderknuckles]

Its not complaining so much as it is taking pleasure in mildly disappointing economic news as it weighs heavily against Obama's re-election.

[fj1200]

Not much to take pleasure in except that it's evidence that excessive intervention is not the answer.

[Kathianne]

Not pleasure. After 3 years of warnings, it's all coming down to the last 6 months. Unreal that so many bought into spending our way to prosperity and food stamps would save the economy!

[Thunderknuckles]

Pleasure may be the wrong.
How about taking mild satisfaction in knowing Obama's policies have failed?
Or am I just the town a-hole on this one? :laugh:

[Gaffer]

Pleasure may be the wrong.
How about taking mild satisfaction in knowing Obama's policies have failed?
Or am I just the town a-hole on this one? :laugh:

More like saying "I told you so". With a smile on your face.

[Kathianne]

What's scary to me is that we can expect little improvement until after November. For that I blame the administration and the Congress.

[Toro]

What's amazing is that we are replaying the same scenario for the third year in a row. Market moves up in the fall and winter because of QE. It moves sideways for a month or two in the Spring, then falls off a cliff in May because QE is ending and Europe can't get it's shit together. Now, we have the spectre of China slowing.

I invest for a living, and this is the hardest market I have ever been in, by far. It is harder than the Tech Bubble collapse and harder than during the Financial Crisis. Back then, it was driven by an economic narrative that was pretty clear. Now, politics are so intertwined, comments from politicians nobody has ever fucking heard of can jack the market up or down 2% in a matter of minutes.

[Nukeman]

What's amazing is that we are replaying the same scenario for the third year in a row. Market moves up in the fall and winter because of QE. It moves sideways for a month or two in the Spring, then falls off a cliff in May because QE is ending and Europe can't get it's shit together. Now, we have the spectre of China slowing.

I invest for a living, and this is the hardest market I have ever been in, by far. It is harder than the Tech Bubble collapse and harder than during the Financial Crisis. Back then, it was driven by an economic narrative that was pretty clear. Now, politics are so intertwined, comments from politicians nobody has ever fucking heard of can jack the market up or down 2% in a matter of minutes.I've noticed every time Obama speaks on TV the DOW drops!!! Just saying!!!

[jimnyc]

I blame it on Zuckerberg and FB. All the markets have been in chaos since those bastards went public!

[Toro]

I've noticed every time Obama speaks on TV the DOW drops!!! Just saying!!!

Truth be told, that was happening to Bush in the summer of 2001. NYSE floor traders were circulating Bush's speaking itinerary and shooting against the market before he began to speak, or so I'm told. Somewhere, I have a great Doonesbury cartoon from that time about that.

[OCA]

Its not complaining so much as it is taking pleasure in mildly disappointing economic news as it weighs heavily against Obama's re-election.

Kind of proves my point that the party not in the Oval Office always wants whats bad for America to happen in order to further their political aspirations. Its pary first country second.

[Kathianne]

What's amazing is that we are replaying the same scenario for the third year in a row. Market moves up in the fall and winter because of QE. It moves sideways for a month or two in the Spring, then falls off a cliff in May because QE is ending and Europe can't get it's shit together. Now, we have the spectre of China slowing.

I invest for a living, and this is the hardest market I have ever been in, by far. It is harder than the Tech Bubble collapse and harder than during the Financial Crisis. Back then, it was driven by an economic narrative that was pretty clear. Now, politics are so intertwined, comments from politicians nobody has ever fucking heard of can jack the market up or down 2% in a matter of minutes.

Three days later, I saw this:

http://www.minyanville.com/business-news/markets/articles/elliott-wave-elliott-wave-theory-jason/6/4/2012/id/41445?camp=syndication&medium=portals&from=yahoo


Reliable Long-Term Indicator Suggests the Bear Market Is Back
By Jason Haver (http://www.minyanville.com/gazette/bios.htm?bio=602) Jun 04, 2012 8:20 am
It appears the only thing that could stave off a bear market now would be further central bank intervention.


MINYANVILLE ORIGINAL Of note, we're finally starting to see a little bit of the panic that I've suggested needs to develop before the market can generate a tradable bounce.

I found the next point sad, but interesting (warning: rant alert!): During the weekend, I couldn't help but notice a fair number of media bulls whining for the Fed to "step up" and intervene in the market -- so it would seem that, deep down, many bulls realize that their only hope for the market to continue higher is Fed intervention. When a market is driven solely by Fed money supply (printing), and not by a fundamentally sound economic backdrop, that's a market bubble. Why are people begging for the Fed to keep inflating a bubble? Have we learned nothing from the housing bubble -- not to mention the last stock (http://www.minyanville.com/business-news/markets/articles/elliott-wave-elliott-wave-theory-jason/6/4/2012/id/41445?camp=syndication&medium=portals&from=yahoo#) bubble? These things never end well.

And what happened to the concept of free markets? Have we Americans strayed so far that we now actually beg the government to intervene and further curtail our freedoms? Try to think five steps down the road here, media-bull interventionists. This stuff is bigger and more important than your portfolio. If you’re that worried about it, you should quit begging Uncle Sam to bail you out and sell the thing. Stocks carry risk -- it's not the government's job to backstop you… because, in reality, you are asking all Americans to backstop you, using the government as our proxy.

I personally have no interest in backstopping anyone's portfolio but my own, and I'm willing to bet that most readers feel the same way.

Let's have a show of hands: How many readers want to continue being taxed silently through inflation caused by QE programs -- and want to keep paying higher and higher prices to put gas in your cars and food on your tables -- so that you can back some media personality’s portfolio? Yes, you sir, in the back... hey, aren’t you a mainstream analyst?

And in the meantime, the Fed is punishing savers by continuing to drive interest rates to zero. To some degree, Americans are forced to carry high risk portfolios in a stock market (http://www.minyanville.com/business-news/markets/articles/elliott-wave-elliott-wave-theory-jason/6/4/2012/id/41445?camp=syndication&medium=portals&from=yahoo#) bubble because the Fed has made safer investments worthless. So, I suppose in that sense, I can understand the begging for continued intervention. The logic goes something like this: "Please Mr. Bernanke, you've forced me to carry this high-risk portfolio to try and earn some return on my savings... I know its value is inflated, but can you please keep it inflated?"

But we are creating our own demons here; one thing leads to the other.

Is there more to it than that? Sure there is -- but I'm ranting about monetary policy at the moment, not trying to consider every side of the argument. As I see it, it's a no-win scenario at this point, and it seems like a system-wide reset may be the only solution. Left to its natural course, I think the free market would reset.

It seems we have two opposing forces at work in the market now:

1. The laws of nature, which seem to consistently demonstrate that bubbles return to their starting point; versus
2. The specter of ongoing Fed (or other central bank) intervention.

Everything in the charts suggests that the laws of nature will win in the end. The question is: Have we reached the end (will the Fed let the free market be free again?) or will the Fed pull another rabbit out of Bernanke's beard? (Trust me, there are rabbits in there, and who knows what else.) And further, can another QE-type program even continue to keep the market elevated in the face of ongoing deflationary forces?

So, my official stance here, just so there's no equivocation: barring further Fed (or other large central bank) intervention, this market will ultimately return to the 2009 lows. I believe it will eventually do so no matter what -- the question is if they will (and are able to) continue kicking the can further down the road to delay the inevitable a while longer. Is now the time? I don't know; I can't see that far ahead -- but the potential is definitely there.

Alright, enough ranting...

Read more: http://www.minyanville.com/business-news/markets/articles/elliott-wave-elliott-wave-theory-jason/6/4/2012/id/41445#ixzz1wpVjdF9c

[Nukeman]

Kind of proves my point that the party not in the Oval Office always wants whats bad for America to happen in order to further their political aspirations. Its pary first country second.
Oh God look what crawled out from its rock!!! Now that you're back you ever going to finish with sassy?? You know that argument you lost soundly!!!!!

[fj1200]

Kind of proves my point that the party not in the Oval Office always wants whats bad for America to happen in order to further their political aspirations. Its pary first country second.

Do you mean all those not-in-the-Oval-Office Republicans that have been clamoring for tax cuts, tax reform, entitlement reform, the repeal of Obamacare, lightening of regulations...

[avatar4321]

Things are going to get ugly in the next few months. Soros is predicting the collapse of the Euro in the next 3 months. We need to be ready for whats coming.