I’ve seen way too much at this point to underestimate what the market is capable of doing. People call me all the time and say, “JC crazy market huh?” or “Did you see that crazy move in XYZ”. Yea I saw it. So what? As Jay-Z said in his latest album,
if everybody’s crazy, you’re the one that’s insane”.
How high can a stock go? Much higher than you think. How low can a stock go? Zero. How low can your account go? In the negatives where you actually owe money. That’s the deal we make when we enter the marketplace.
So there is being overly dramatic and there is being realistic. We’ve seen these clowns calling for market crashes since a month after the last one was over. They prey on vulnerable hard working citizens preaching the end of the world and they make a ton of money doing it. They’re terrible people.
It’s my job as a market participant to identify the risk that is on the table at any given time. Until just recently, the risk in U.S. Stocks had been higher for years. Not being aggressively long, was the real risk in my opinion. All of that changed in early October.
So here we are 2 months later and stocks are near their lows and we’re all wondering whether this is just a long sideways consolidation to reset the market sentiment before heading higher? Or is this massive distribution that will lead to a more significant break?
I think there are three charts that we want to pay attention to. I firmly believe that a much more severe correction is on the near term horizon if these charts start to break, and we’re awfully close. [Read more…]