Monday, February 1, 2016

January Was A Dud; February Starts Badly; Markets Due for Breakdown

Call this a "call 'em as we see 'em" post.

Stocks started February without continuation of the "Japan Negative Interest Rates" rally of Friday, falling out at the opening bell and doing little to inspire confidence throughout the session.

The stock market is down and will likely stay down for the remainder of 2016, go lower in 2017 and disintegrate in 2018. That's the optimistic point of view.

There's nothing good in this market. You pick stocks you think have a good business model, reliable earnings, maybe even a dividend, and, then, WHAM! it gets whacked like a mafioso underling who looked the wrong way at the boss.

Take for instance, the case of this stock (ADS), which last week released earnings above consensus, though the top line (revenue) fell a little short. What happened? Nobody is certain, but the stock took a 20% haircut on January 28. There seemed to be no justification for the radical downsizing of the price of Alliance Data Systems, a company heavily involved in online advertising.

That's just a sampling. Things like this happen every day, without warning nor explanation (we looked, and couldn't find a reasonable telling). So, say you had $20,000 tied up in this company. That was Wednesday. As of close of business on Thursday, you have $16,000. There's a couple months off your planned retirement.

Suppose you held it in a 401k or other such pension vehicle. There was absolutely nothing you could do about it, either before or after the fact. You were stuck, like a good sucker at a rigged casino. Thank you for playing. Come again. And individuals do. They come back for more and more punishment. They loved it the past seven years, when stocks went straight up, no matter what. But now, things have changed.

It's still not too late to pull all your money out and invest in silver, gold, cash, and anything else you might need in retirement (canned goods, anyone?).

The US stock markets - and likely, all markets, globally - suck. They suck the life out of investors and then, you get to pay taxes on any gains, and sometimes, on losses. So, suck it up or get out.

Today's closing fake numbers:
S&P 500: 1,939.38, -0.86 (0.04%)
Dow: 16,449.18, -17.12 (0.10%)
NASDAQ: 4,620.37, +6.41 (0.14%)

Crude Oil 31.64 -5.89% Gold 1,128.40 +1.07% EUR/USD 1.0888 +0.53% 10-Yr Bond 1.9660 +1.81% Corn 371.00 -0.27% Copper 2.06 -0.41% Silver 14.35 +0.75% Natural Gas 2.15 -6.48% Russell 2000 1,032.39 -0.29% VIX 19.98 -1.09% BATS 1000 20,713.55 +0.14% GBP/USD 1.4426 +1.35% USD/JPY 120.9405 -0.31%

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