E Market Briefing For Monday, Feb. 12

As everyone focuses on the Olympics (and the South Korean President Moon's apparent acceptance of an invitation to visit Pyongyang soon to meet with Little Rocket Man); perhaps one should watch Sec'y of State Tillerson's visit to the Middle East this coming week; nobody noticing. At this point let's focus more directly on the stock market which has many if not gloomy, almost universally convinced it's just a dip along the way (of course they're generally a crowd that didn't agree the market would get to the moon if Trump won; and chased it higher later in the game). 

For some time I had circled the areas around 2300 +/- for the S&P, as a 'reasonable' area we should ultimately be headed to. Traders focused on Moving Averages perhaps rightly identify battlegrounds; but miss the underlying reality that (so far and especially on the first break and rally that ensued) liquidations will break supports; and those attempting very classic efforts to 'buy dips and sell rallies'; actually had to move at nearly the speed of light; because moves were 'textbook', but incredibly swift.

As noted after visiting the 'Money Show' (only briefly) the other day; the mood was glum but 'resigned' toward an overdue setback for stocks. As far as I could tell, everyone (though not proactive like we were ahead of the crash) was describing this as a normal and healthy (if fast) market 'correction'; nobody was calling it a bear market; and more importantly none were advocating selling anything; but holding on, since it can't be expected to continue.

Well, not at the pace we've seen; but how to they know that? They don't. I like to say 'let the market tell us when it's done going down'. We have shared a couple 'possible' ways that could happen: a truly dramatic 'V' bottom (not seen yet); or a period of hammering on a 'base' (also not at all constructed as yet). Or maybe some dramatic intervention or 'PPT' (Plunge Protection Team) Fed move.

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