Defending 15,000

Just kidding.

Some thoughts on today’s Biebering in the stock market:

It’s jarring to be experiencing genuine volatility in both stocks and bonds for the first time in what seems like half a year. Nobody expected it except for the people who’ve been expecting it daily since the year began – and they don’t count anymore. If I wanted to hear from a broken clock, I’d drop a nuclear bomb on Switzerland.

If this is The Correction, it certainly hasn’t been very ferocious so far. The Vix is still a teenager and the buy-the-dip people are actually chirping about buying dips. Even the guys who run make-believe funds aren’t switching over to tell us how short they are just yet. The majority of players are maintaining their constructive tone from what I can see. Which means not enough damage has been done.

Through this prism, the reaction to Friday’s jobs report is impossible to foresee should the actual number be far away from expectations. A wildly strong number is “good news” because it means the economy is strengthening – but then a very weak number is also “good news” because it pushes out the taper.

Yes, we’re back in that mode again, ad hoc explanations that attach a narrative to every reaction to to every data point. Good is bad and bad is bad and on and on.

Personally, I’d prefer to see real economic strength and the markets get used to the coming taper, regardless of how that hits stock prices short-term, but nobody cares what I want.

In the meantime, the longer this weakness continues, the more buying opportunities present themselves, finally.

My friend Howard Lindzon once said, during a massive rally years ago, that when the market is trending higher you cannot think straight. Now that we’ve hit the wall and the relentless melt-up has paused, I’d recommend taking some time to do some thinking and research.

Catch your breath, for the first time since Thanksgiving.

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