This market has had the “market” beaten out of it. If I had any sense – or, more precisely, if I had the sense to not have any sense – I'd just throw charts and reason out the window and dump my entire net worth into SPY calls so I could spend the next ten years cleaning out my nostrils. But I'm not dumb enough to be smart, so I can only sit back and watch, slack-jawed.
Take the chart below, for instance, from which I've removed the price bars; I merely show a trio of exponential moving averages (50, 100, 200) against the S&P 500 index (SPX).
The “market” didn't die in late 2008, when the Fed began its massive intervention. Although trillions of dollars of money from thin air gave the market a bottom, which allowed it to commence a turnaround on March 6, 2009, we still had a market to play with. I've marked this section as “1”.
During this time, we had a couple of meaty downdrafts. The first was in the summer of 2010, when Europe (and, more specifically, the Euro) looked ready to fall to pieces. The Euro and u.s. equities were virtually one and the same (and in case you hadn't noticed, these two have long since decoupled, since the utterly-trashed Euro, were it still joined at the hip to US markets, would have dragged the Dow many thousands of points lower than it is right now).
Suffice it to say that Europe went “all in” with the kind of insanity that the US Federal Reserve had conjured up, and that crisis was “solved.” (You'll have to forgive my frequent use of quotations in this piece, but I find them necessary; were I telling you this verbally, I would be using air quotes.
The second downdraft was the very next year, late in the summer of 2011, when the nation's staggering debt was causing alarm. (I would point out at this juncture that this “staggering” debt was trillions of dollars ago, and Uncle Sam would give his left nut to reduce his debt down to the level of mid-2011 at this point). This time, a spineless John Boehner caved in to Obama, and the notion of any kind of limit to the nation's debt was thrown out the window. The debt ceiling become a permanent joke.
