It’s only Monday. I posted a Control Panel yesterday and usually post only once a week.
But today’s Control Panel is rather special in its ugliness.
Click on each chart to see the details. The stock indexes are gapping down, like falling off a cliff. VIX is gapping up but not to panic levels.
https://stockcharts.com/freecharts/candleglance.html?VTI,$SP…
The Percent of S&P 100 stocks above their 200 day moving average is 22 and falling fast. On January 1 it was 75.
The bond panels simply made me gasp!
https://stockcharts.com/freecharts/candleglance.html?$IRX,$U…
https://stockcharts.com/freecharts/yieldcurve.php
Junk bond spreads are elevated but not to panic levels.
https://fred.stlouisfed.org/series/BAMLH0A3HYC
The Fear & Greed Index is in Extreme Fear (but could be worse).
https://www.cnn.com/markets/fear-and-greed
Financial stress is very low.
https://fred.stlouisfed.org/series/STLFSI3
Conclusion: this is a bad day on Wall Street but it’s not a panic and it’s not a bottom for either stocks or bonds.
Wendy
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I wonder if the lack of “Saul Stock” posts is an indicator? That board has all but disappeared.
intercst
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I wonder if the lack of “Saul Stock” posts is an indicator? That board has all but disappeared.
Absolutely. I have thought that for more than a month now. Those guys are down 60% year to date. More since November. The most risk I can handle right now is QQQ and that is getting clobbered enough for me. I would not touch SaaS or Cyber Security until I see that board becoming a watering hole once again.
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Intercst, you were the one who posted about the Schiller book that may as well have been titled, “Every Bubble Has a Story.”
I have said exactly that for many years. Whether it was “Peak Oil” in 2007 or dot-com stocks in 2000 or “Real estate only goes up,” every bubble has a story that sounds plausible.
Saul and his board have been very thorough about carefully documenting their story. They have plausible reasons for rejecting old-fashioned P/E ratios and other metrics that supposedly don’t apply to SaaS stocks. But anyone who has read “Manias, Panics and Crashes” or “This Time is Different” would have recognized the clear markers of a bubble. And the SaaS companies actually provide valuable services, unlike cryptocurrencies that have their own story, “Blockchain,” but provide no service at all. Now, that’s a classic “Tulip bulb” bubble.
People who don’t know the history of the markets can easily buy into the plausible stories of bubbles.
I avoid bubbles. I buy anti-bubbles, such as when the price of oil went negative in March 2000 and I bought XOM. And I bought TIPS when the interest rate of TIPS was higher than the interest rate of the Treasury in October 2008 for the only time in its history.
The next time that VIX goes over 50 and the Financial Stress Index goes over 2.5 at the same time I will back up the truck and buy QQQE. Until then, I will avoid all NAZ stocks, especially SaaS stocks.
Wendy
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WendyBG writes,
Intercst, you were the one who posted about the Schiller book that may as well have been titled, “Every Bubble Has a Story.”
I have said exactly that for many years. Whether it was “Peak Oil” in 2007 or dot-com stocks in 2000 or “Real estate only goes up,” every bubble has a story that sounds plausible.
It’s not just “bubbles” that have massive macroeconomic effects. Shiller goes into great detail on the incredible economic narrative of the “Laffer Curve” and forty years of trickle down dumbfookery.
intercst
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Did you say ugly?
No need to click anything, just look at my port…UGLY!
The Captain
<No need to click anything, just look at my port…UGLY!>
That’s the “risk” part of high-growth ports. They zoom up and down. Then up and down.
My nerves can’t handle that volatility. That’s why I have a stodgy, low-risk port. It tiptoes up in good times and sighs down a little in bad times. The older I-Bonds, which aggressive investors sneer at, are throwing off 12.5% interest.
Being a conservative investor is an exercise in boredom, good times and bad. Just what I like. 
Wendy
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