Thank You Bear Market Rally!
Oct 02, 2015
Good Friday morning all. ABYSMAL is me being nice...Septembers job creation figures of just 142,000 new jobs came in a full 60,000 lower than the estimates. In addition, and this is just as big, both July and August job figures were revised lower by a total of 59,000 jobs.
Yes, the "official" rate was left unchanged at 5.1%, but we know that this number is as phony as Caitlyn Jenner's drivers license. NO WAY the FED can raise rates now...the question now becomes, what exactly has Janet Yellen been smoking??
I hate to pat myself on the back...but as I've pointed out a couple of times in the past, how is it that the FED has more than 1000 economists on their payroll...each with PHD's and making well into the 6 figures, when a guy with a bachelors degree (business) from Sam Houston State Univ. is able to make far more accurate economic/interest rate forecasts??
For those that may not know much about SHSU, I can share that we Bearcats are a feisty bunch...we are named after the great General Houston himself, after all...but it's also safe to say that we're not commonly known as the Harvard of the South. Regardless, I have consistently said for years that the FED will be forced to launch far MORE QE going forward...rather than less...and any talk of raising rates is just wishful thinking. Folks, in no time at all, we could be right back in a recession...this is NOT when you raise rates. Maybe its just me, but this seems like a simple concept.
Dow futures were up close to 100 points before the number, but following the surprise (the market hates surprises) we saw a complete about face, with losses of 200 points + at the open.
The question we have to ask ourselves now is; was that it for the bear market rally? Are we about to drop more than 2000 points (as my article yesterday discussed)?
I do not think so. First, the markets remain highly oversold...this doesn't mean that we cannot drop further from here, but with most investors overtly bearish, the odds are against a massive drop from current levels. But hell yes...I will be watching closely, should we need to exit our new leveraged ETF positions.
But here's what I believe might be more likely; once the markets settle...and everyone realizes that higher rates are now several months away, and that easy money policies are likely here to stay, stocks may well find their footing and begin to move higher.
And has that ever happened today...following the opening losses of 230 points, the market has spiked sharply...with current Dow gains of 70 points.
Current gains in the VRA Portfolio will soon push us past 2000% in net profits since beginning of 2014. Imagine how well we will do when stocks enter bull market territory again...
Have a great weekend all.