Some realities of life hit hard even when we know that they're inevitable. Take some of these recent unnerving trends:
The Minnesota Vikings had to lose. It seemed like the Vikings cheated losing on more than one occasion this season but yesterday it felt like they were outmatched from the very beginning when Pittsburgh put it on them. (By the way, there was a hit in that game between Adrian Peterson and a defensive back on the other squad named William Gay. Peterson crushed the guy, and then stopped on him. It reminded me of that hit back in the day between Isaiah Robinson and Earl Campbell.) Two plays later, Favre threw an interception and the Steelers returned it for a TD and that sealed the win.
A couple other trends said to be on the verge of coming to an end are the dollar's role and US superiority internationally. Today, the dollar is exhibiting signs of life, which is spooking the equities markets. It's amazing how swiftly stocks gave up ground when the dollar rebounded. At this point, we want to believe that some of the rally is occurring not only because of the weak dollar. We'd like to believe that it's not all about giant multinational corporations making money from overseas but also from a rekindling of domestic demand.
The reaction to the rebound in the dollar is worrisome to say the very least. It's not that stocks aren't overvalued in the short-run or that gold hasn't had a move based mostly on inflation in the pipeline, but rather investors have become unrealistic about periodic pullbacks. I think that we are entering a period of serious volatility marked by triple-digit point sessions to the upside and downside on a mix of profit-taking and basic concerns. I don't see panic (yet), but I see investor hesitation. In a market that needs to swim all the time, any pause could be misconstrued as something more sinister.
If ever there was an ominous chart, it's the two-day Dow Jones Industrial Average chart. Stocks came out of the gate with vigor. Once again, the focus of investors was on the safety of "Blue Chip" names. Right now, there are 2,063 decliners as compared to only 875 advancers. To be honest, I was trying to figure out why the market surged at the open. Then the question was...did anyone get the license plate of the truck?
Two-Day Dow Chart
This kind of angst is natural when it comes to the stock market. It's not fun, but inevitable.