On A Slope Of Hope
Its the bear markets version of the wall of worry, which most financial pundits point to for a bull market to climb higher. As with most bull market mantras, there is an opposite, and sometimes more destructive, bear market version. That would be the "Slope of Hope"...which we seem to be on. As investors enjoy the recent stock market bounce, a dangerous calm has set in. All the new & improved stabilization actions taken by the government have again slowed the decent in stocks, but the damage is upon us & will continue to be reflected in the data & the healing is far from done. While it 'feels' like the market has stabilized & is shrugging off some pretty difficult economic & corporate newsflow, this stabilization is tentative at best. Real bear markets, and that's what we are in, tend to drag a bit...rather than spike down & rebound sharply, only to begin rising steadily. Instead, each tumble lower is met with a bounce followed by a bit of stability, before lurching lower...and then repeating. Disenchantment, disinterest, & disengagement sets in...CNBC might even stop asking you "Is Your Money Safe?" & "Do You Know Where Your Money Is?"...that would be a tell of sorts. Then it goes dead for awhile as investors recover & readjust to a new economic reality & net worth. I think we remain firmly on a slope lower...with a crash only prevented by the hope that the worst is behind us & the leaders are going to be able to reverse the economic slide. That hope may soon be replaced by worry followed by despair.