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Lloyd Khaner: It's Beginning to Feel a Lot Like 2000

By

Investors are becoming increasingly concerned over -- and baffled by -- this sideways correction.

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What's all the griping about!? The Dow (INDEXDJX:.DJI) and the S&P 500 (INDEXSP:.INX) are basically flat for the year. Oh, the Nasdaq (INDEXNASDAQ:.IXIC) you say? Eh, well, down 2%. Oh, and the Russell 2000 (INDEXRUSSELL:RUT)? Hmm, down 4%. And those individual tech-mo' highfliers from 2013? Okay, you can gripe a bit.
 
This Marvin "What's Goin' On?" Gaye market is confounding the pros and scaring the Joes. No one really knows why we are having this sideways correction or what started it, but make no mistake, stocks are taking a break. And some are just breaking. Blame de-levering, profit-taking, pre-bear-market selling, consolidating, or correcting -- it ain't over yet.
 
And if the stock action wasn't turbulent enough for you already, this week we get a fire hose of economic numbers picking up where last week's earnings stream left off. The numbers start hitting in earnest on Wednesday and continue through Friday. Jobs, inflation, GDP, ISM, CPM, FOMC, spending, deflator, claims, comfort, cars, underemployment, consumption (consumer buying patterns, not the archaic name for pulmonary tuberculosis), and homes. All of the aforementioned are coming soon to a headline near you. Tune in next week to find out what if anything they all mean.

Here's a quick look at the worries facing stock market investors. Click on the image below for an interactive version of this week's Wall of Worry, or scroll down for the text-only version and an explanation of how the Wall works.


 
QE: "Sweet dreams are made of this...." Does that mean a nightmare is in the future?
 
UNEMPLOYMENT: Here in the U.S. of A. we like big, so this week we got a big payroll number coming on Wednesday, April 30 and a bigger payroll number coming on Friday, May 2. More big! Can I get an amen? 
 
INVESTOR SENTIMENT: I love you! I hate you! I love you! I hate you!...
 
EUROPEAN ECONOMY: Quietly, very quietly -- like at that special, only-dogs-can-hear-it level -- getting better.
 
HIGH-FREQUENCY TRADING:
Lloyd: Say good night, Gracie.
HAL: Nah, still getting my freak on.
Lloyd: Good night, and good luck.
HAL: Dude, I stillz got skillz.
Lloyd: The Fat Lady isn't just singing, she's belting out "Rigoletto."
 
CHINA: May be joining the Club of Intentionally Depreciating Currencies. Exclusive it is not.
 
RETAIL SPENDING: Malls converting into multifamily housing -- a crazy idea for crazy times. I wonder if you would have to pay for parking?
 
US ECONOMY: Eco-numbers fire hose includes GDP, ISM, inflation, and sundry other numbers this week.
 
ECB: Weaken the euro? The market vigilantes are trying to stare down Mr. Draghi.  
 
MOMENTUM STOCKS: It's beginning to feel a lot like 2000, everywhere you mo'....
 
EMERGING MARKETS: The only thing emerging right now is money coming out of these markets and going into anything else.

VOLATILITY: The broad market acting like a bumper-car ride while the market averages continue their delicate carousel circles to nowhere.
 
UKRAINE: "Mama said there'd be days like this."
 
RUSSIA: Playing its cards very close to the vest. Both sets of cards, that is.
 
US FED: Will an economic slowdown slow down the pace of bond buying by the Fed?
 
EARNINGS SEASON: Still going....
 
VOLUME: Anybody out there investing? "Where has all the volume gone...?"
 
HOUSING: Mortagage applications are a bit weak. We start to worry when the banks start offering BOGOs (Buy One, Get One deals).

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.
Positions in DIA, SPY, GLD, GDX, GDXJ, TBF, EUO
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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