Casino patrons are in the full wash/rinse/repeat cycle now. The Godfather of the men who stare at charts calls the market broken in the media and it is comforting for the retail investor to be on the sidelines.
But then the market tests the February lows, reverses and bounces (right on plan, I might add); 1 day… 2 days… 3 days (maybe). At what point does the lowly casino patron start to get the feeling “I’ve been duped!”? 1… 2… 3? 4? 5?
He has the legitimate fear that if he buys in now the thing is going to roll over on him for another rinse cycle. He cannot win, which is why FOMO (fear of missing out) is such a tough condition. It’s why legions of perma-bulls (especially certain financial advisers not operating on a ‘you do well, we do well’ model) set it and forget it. Just invest for the long-term.
In part because dat FOMO done be a bitch.
I don’t want to sound like a bull wiseguy. But it is going according to the plan laid out last weekend, a hint of which was included in this post: Time for Pressure Relief?. It appears that the storm has passed for now, but we need to remain vigilant as the process grinds forward. Bigger picture and longer-term, as the Godfather noted, damage has been done.
Meanwhile, here is the VIX having made a lower high with a lot of real estate between it and the junction of the SMA 50 and SMA 200.
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