Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

The 'Chewing Gum' Technical Rallies Continue


The Wall of Worry is high as no one knows what to expect or do with this stock market rally.

MINYANVILLE ORIGINAL We'll take what we can get but these "chewing gum rallies" don't taste very good, don't last very long, and you don't know what to do with them when they're done. That said, the technicals were oversold, the shorts were pressing, and the Dow (^DJI), S&P (SPY), and even the IBEX (^IBEX) were due for a bounce,and they got one -- a low volume, low volatility one at that.

Rally or no rally we are still smack dab in the middle of major eurozone crisis management mode, awaiting a critical election on Sunday in Greece -- perhaps the most important vote in world history right up there with the 2002 M&M new candy color vote (purple won).

All joking aside, though humor keeps the head clear in times like these, we have meetings coming up this week in Europe, a smattering of economic numbers in the US, and hopefully more indications from China about how they will pump up their economy and all of ours with it.

And if you're listening out there, "Hey Italy, you're next."

This week's Wall of Worry stands at an uncomfortably high 29 blocks. Scroll down for a text-only version of this column and an explanation of how it works.

(Click on image to expand graphic.)

Lloyd's Wall of Worry [Text-only]

QE: C'mon, Summer Santa Ben, put something shiny and new in our stockings for we have been good boys and girls (crossies count).

US ECONOMY: "Slippin' and a slidin', peepin' and a hidin'…."

UNEMPLOYMENT: Getting that sinking feeling that the US will see a 10-handle on its unemployment rate before it sees a 6-handle.

INVESTOR SENTIMENT: Think it can't get worse? Raise the tax rate on dividends and people will have more love for professional boxing judges (did you see that Pacquiao-Bradley fight?!) than the bits and pieces of companies we affectionately call stocks.

HOUSING CRISIS: "We're in a definite type of situation here." Could there be a better subject for a Woody Allen quote?

CENTRAL BANKS: All hail! You are collectively crowned the largest hedge fund in the world!

EUROPEAN ECONOMY: "Bluer than blue, sadder than sad…."

THE EUROPEAN UNION: My BIL (brother-in-law) Jon says it's all about "Lionel Ritchie." Key man, lead singer Ritchie is Germany and all the other countries in the EU are expendable, synchronized dancing Commodores.

SOVEREIGN DEBT: Europe is drowning in this stuff and more keeps flooding in…"How high's the water Mama? Five feet high and risin'…."

SPAIN: The money ball gets passed from the ESM/EFSF to the "FROB" (fondo de reestructuracion ordenada bancaria) to Spanish Banks. It does worry me when Hobbit-sounding organizations are a key link in the chain saving the world's financial system.

10-YEAR TREASURY YIELDS: I hereby dub the ETF TBT the 2011-2012 Financial Market Widow-Maker winner as this one-way bet against the American 10-year has lost 57% of its value in the last year.

FINANCIAL INSTITUTIONS: Selling what they can sell, cutting what they can cut, hiding what they can hide.

VOLATILITY: Hitting anything that isn't nailed down, and once the hurricane season starts you can include that stuff too.

Lloyd: Favorite TV show?
HAL: Easy. Star Trek.
Lloyd: Favorite character?
HAL: Spock! "…an unscrupulous man would gain certain knowledge of man's future. Such a man could manipulate key industries, stocks and even nations…"

CHINA: Hey, China, the world economy is counting on you, our "biggest and bestest toe," as Sgt. Hulka (Stripes) would say.

STOCK MARKET TECHNICALS: The Chewing Gum Rallies continue. They don't last long, they don't taste too good, and you don't really know when they will run out or what to do with them when they do.

GERMANY: "Bewitched bothered and bewildered…."

GLOBAL ECONOMY: "We will all go together when we go, what a comforting fact that is to know…."

INDIA: May be the first BRIC country (Brazil, Russia, India, China) to lose Investment Grade Status which would leave us with the less potent, awkward acronym "BRC Countries." Leaving me saying, "Pat, I'd like to buy a vowel."

TOO BIG TOO FAIL BANKS (TBTFB): There is a silver lining here. In the US they do have an oligopoly.

US PRESIDENTIAL ELECTION: Now we got a horse race…"June is bustin'out all over…."

NATIONALIZATION: "Gimme! Gimme! Gimme!"

BANK RUNS: Sitting by my trusty TV just waiting for a sneaker company to come up with a Bank Run Shoe like the "Greco" or the "Correr!" to meet European market demand.

THE CLIFF: Question: Why would you knowingly drive off a 1,000-foot cliff guaranteeing disaster for you and everyone you know? Answer: Because your political party told you to.

GREECE: The June 17 election will probably be the most important one they've had since their first one around the year 500 BC. Let's hope it's not their last.

PMIs: Purchasing Managers Indexes all over the world all hittin' the bricks (1940s slang for slowing/stopping) at the same time. Yikes! (2012 slang for "Yikes!")

IPOs: This exit strategy has frozen up for now…let's hope it's not an ice age.

EURO CURRENCY: Hmmm…may be time to get into the currency printing business just in case.

ECB: "Ooh, I got work to do, I got work baby, I got work to do, I got a job yeah…."

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.
< Previous
  • 1
Next >
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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos