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business newsInvestors Less Fearful: Animal Spirits Are Stirring
By
Lloyd Khaner
Feb 07, 2012 5:15 pm
That said, it's hard to jump in at these levels.
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If greed drives markets higher and fear drives them lower, then the animals out there are looking a bit greedy as of late. Do markets go straight up? Nope, but some are starting to think that they do, as the NASDAQ (^IXIC) is now up over 10% year-to-date, and the Dow (^DJI), the S&P 500 (SPY), and every other major stock market are up over 5% -- with the exception of the Mexican Bolsa. Pobrecita!
So here we are, hard to jump in at these levels especially with the “fat” tail risk out there, and it’s hard not to jump into the market with all the “phat” tail upside potential. Stay tuned, it’s gonna be interesting to see what we animals will do next.
Lloyd's Wall of Worry stands at 21 blocks this week. Click on the graphic below for specific comments about the market issues facing investors. For a text-only version of this column and explanation of how it works, scroll down.
Lloyd's Wall of Worry -- Text Only
QE: Would be a real buzzkill if anyone stops printing and pumping. Got that, UK? ECB? China?
US ECONOMY: The best house in the developed world's economically bad neighborhood. And yes, it’s upside down on its mortgage.
UNEMPLOYMENT: 243,000 new US jobs. You can slice 'em, dice 'em, sauté 'em, or filet 'em – the fact is that sans finance ding! ding! the hiring has begun.
INVESTOR SENTIMENT: Animal spirits starting to sniff around for a market opportunity and a little more in the way of “the coast is clear” confidence.
HOUSING CRISIS: You gotta love a country where the only hot real estate sector is the cash-only market for homes over $50 million. “God Bless America, land that I love....”
CENTRAL BANKS: Volcanic, Tsunam-ic, Avalanche-ic, Berserk-ic, Blizzard-ic metric F’tons of liquidity being pumped into the markets. Historic.
EUROPEAN ECONOMY: Recession? Yes. The question is will it be mild, medium, or hot and spicy?
THE EUROPEAN UNION: Still the best place in the world to get wine, cheese, and a men’s suit cut so slim that no American male will ever be able to fit into it. Hey, I’m trying here!
SOVEREIGN DEBT: Pay me 6% to buy the paper of a country that is insolvent 11 million times over. Sure!
JAPAN: Their trade deficit goes negative for the first time since 1980. Coincidentally, the same year the song “Turning Japanese” hit the Billboard Hot 100 list. Meaning? None whatsoever.
GREECE: They have agreed to most every ECB austerity demand except turning over the budget reins to a eurozone committee and the request to change the spelling of their name to “Grease…Grease is the word, is the word, is the word, it’s got groove it’s got meaning…”
SUMMITS/MEETINGS: Davos came and went like puffy white clouds against a cool blue sky. Next up, ECB on February 9.
BANKS: Psssst, hey, banks, you gotta start lending again because…because…because that’s what banks do. I read that in the history books about olden times, you know pre-2000.
VOLATILITY: Said the hypnotist to the VIX, “You are getting sleepy, very very sleepy….”
HIGH FREQUENCY TRADING:
Lloyd: Enjoying this straight up market, Hal?
HAL: Contemplating retirement. Jerry in mutual funds suggested I try being a doorstop.
Lloyd: Your thoughts?
HAL: Would be a nice change of scenery.
CHINA: Gearing up to support the EU with gobs of cash. And if that doesn’t work, they are also gearing up to blame the EU for their own economy hitting the skids.
STOCK MARKET TECHNICALS: The technicians are screaming for a breakdown or at least a correction. Why? So they can buy, buy, buy!
EARNINGS SEASON: Good numbers and you’re up 10%, bad numbers and you’re down 10%. Beats last year’s up nothing on good, down 40% on bad.
BALTIC DRY INDEX: Low. How low you ask? The last time it was this low the world had one continent called Pangaea and there was no need for ships since everyone was connected by land.
CREDIT WATCH: The downgrades keep coming in as regular as the tide. And, just like with the tide, no one much cares.
IRAN: The best friend the price of Brent crude has. For everyone else, pretty much the worst.
What Is Lloyd's Wall of Worry?
by Lloyd Khaner
Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.
Typically the term "wall of worry,” refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.
This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."
In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
So here we are, hard to jump in at these levels especially with the “fat” tail risk out there, and it’s hard not to jump into the market with all the “phat” tail upside potential. Stay tuned, it’s gonna be interesting to see what we animals will do next.
Lloyd's Wall of Worry stands at 21 blocks this week. Click on the graphic below for specific comments about the market issues facing investors. For a text-only version of this column and explanation of how it works, scroll down.
Lloyd's Wall of Worry -- Text Only
QE: Would be a real buzzkill if anyone stops printing and pumping. Got that, UK? ECB? China?
US ECONOMY: The best house in the developed world's economically bad neighborhood. And yes, it’s upside down on its mortgage.
UNEMPLOYMENT: 243,000 new US jobs. You can slice 'em, dice 'em, sauté 'em, or filet 'em – the fact is that sans finance ding! ding! the hiring has begun.
INVESTOR SENTIMENT: Animal spirits starting to sniff around for a market opportunity and a little more in the way of “the coast is clear” confidence.
HOUSING CRISIS: You gotta love a country where the only hot real estate sector is the cash-only market for homes over $50 million. “God Bless America, land that I love....”
CENTRAL BANKS: Volcanic, Tsunam-ic, Avalanche-ic, Berserk-ic, Blizzard-ic metric F’tons of liquidity being pumped into the markets. Historic.
EUROPEAN ECONOMY: Recession? Yes. The question is will it be mild, medium, or hot and spicy?
THE EUROPEAN UNION: Still the best place in the world to get wine, cheese, and a men’s suit cut so slim that no American male will ever be able to fit into it. Hey, I’m trying here!
SOVEREIGN DEBT: Pay me 6% to buy the paper of a country that is insolvent 11 million times over. Sure!
JAPAN: Their trade deficit goes negative for the first time since 1980. Coincidentally, the same year the song “Turning Japanese” hit the Billboard Hot 100 list. Meaning? None whatsoever.
GREECE: They have agreed to most every ECB austerity demand except turning over the budget reins to a eurozone committee and the request to change the spelling of their name to “Grease…Grease is the word, is the word, is the word, it’s got groove it’s got meaning…”
SUMMITS/MEETINGS: Davos came and went like puffy white clouds against a cool blue sky. Next up, ECB on February 9.
BANKS: Psssst, hey, banks, you gotta start lending again because…because…because that’s what banks do. I read that in the history books about olden times, you know pre-2000.
VOLATILITY: Said the hypnotist to the VIX, “You are getting sleepy, very very sleepy….”
HIGH FREQUENCY TRADING:
Lloyd: Enjoying this straight up market, Hal?
HAL: Contemplating retirement. Jerry in mutual funds suggested I try being a doorstop.
Lloyd: Your thoughts?
HAL: Would be a nice change of scenery.
CHINA: Gearing up to support the EU with gobs of cash. And if that doesn’t work, they are also gearing up to blame the EU for their own economy hitting the skids.
STOCK MARKET TECHNICALS: The technicians are screaming for a breakdown or at least a correction. Why? So they can buy, buy, buy!
EARNINGS SEASON: Good numbers and you’re up 10%, bad numbers and you’re down 10%. Beats last year’s up nothing on good, down 40% on bad.
BALTIC DRY INDEX: Low. How low you ask? The last time it was this low the world had one continent called Pangaea and there was no need for ships since everyone was connected by land.
CREDIT WATCH: The downgrades keep coming in as regular as the tide. And, just like with the tide, no one much cares.
IRAN: The best friend the price of Brent crude has. For everyone else, pretty much the worst.
What Is Lloyd's Wall of Worry?
by Lloyd Khaner
Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.
Typically the term "wall of worry,” refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.
This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."
In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
No positions in stocks mentioned.
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