A Few Hours of Pleasure, and Bears Have Had Enough

With a drumroll and a little more fanfare than usual, I asserted here the other day that the stock market was due for a nasty drubbing — a comeuppance for the hubris that has goosed the FAANG stocks into outer space. But if Wednesday’s humdrum retracement is the best that sellers can do, we permabears are going to have to resume a familiar position  — i.e., bent from the waist, hands gripping our ankles. When I say that price action was humdrum, I mean mild and predictable. Although the S&Ps were down almost 40 points in the early going, they’d recouped half of it by the final bell. As for being predictable, judge from the chart (see inset): The intraday low occurred almost exactly at the ‘D’ target of the pattern shown. Sellers were docile, orderly — and completely winded just 90 minutes after the session began. As I continue to remind subscribers, the bull market, now celebrating its tenth year, won’t end until portfolio managers wake up one morning in a cold sweat, asking themselves, What on earth have I done?? Until this epiphany comes, all they’ll need to do to maintain control of the markets is buy shares in the same half-dozen stocks they’ve obsessed over for years.