Speaking for myself, and after nearly 37 years of being in the business, I can't remember a period of such despair for the country's future. But, I'll snap out of it, um maybe. The country has been in a bad spot the past few years transcending two administrations. Sure, QE and QE2 plus ZIRP have driven stock prices higher previously but little else has improved.

Unemployment, housing, debt, war and perhaps just as important, no coherent energy policy are at the core of our frustration and disappointment. The country suffers generally from a leadership vacuum and courage to face up to problems.

Sadly most politicians would rather cynically try to score cheap points than be serious. Most Americans would gladly do what it takes to make things right but there just isn't any guts politically to make the hard choices and explain them to the people. Think what you will of Paul Ryan's plan, at least he's put something on the table that's serious. Where are his counterparts' proposals?  

I've felt pessimistic before but I don't believe I've seen this much disappointment, concern and frustration throughout the country.

Meanwhile, back at Wall and Broad, markets continue their correction. From my biased view, what we're seeing is a technical reaction to monthly DeMark 9s completed in May and the likely end to the safety net from QE2. Also markets appear very similar to 2010 when after the May "flash crash" we just churned violently throughout the summer. We haven't had a "flash crash" obviously but so far just a rollover into what is for now a shallow correction. Remember, in the fall of 2010 markets were lifted by the commencement of QE2. A QE3 seems off the table so goes the conventional wisdom but I don't trust the Fed any longer.

Let's not forget some companies are doing great things with Apple ( AAPL) on display today but they're the exception. Others sporting gains are based on a weak dollar, cheap money from Fed policies and financial engineering schemes including stock buybacks financed by low interest bond sales. This isn't productive ultimately even if it makes earnings look better on fewer shares.

Monday, commodities were down overall, the dollar was a bit higher, bonds may be maxed-out in price and stocks are now officially short-term oversold. I expect a bounce in the next day or two but that's about it.

Volume declined slightly from Friday but still is more elevated than we've seen in a long time. Breadth per the WSJ was quite negative and completes part of the oversold picture.

 

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