(This article was first published Dec. 15 on Real Money Pro.)
Fare you well my honey
Fare you well my only true one
All the birds that were singing
Have flown except you alone
Going to leave this broke-down palace
On my hands and my knees I will roll roll roll
Make myself a bed by the waterside
In my time, in my time, I will roll roll roll..
--Grateful Dead, "Brokedown Palace"
The cyclical bull market is in jeopardy -- the light of Mr. Market's message may not yet be red, but it most assuredly is amber. To paraphrase The Grateful Dead's Jerry Garcia:
I have been shopping around for something to do that no one will like" (a bear market?)
'Cause "if the thunder (fundamentals) don't get ya then the lightning (technicals) will.
My cautious fundamental views seem to be gaining legitimacy of late. Now the technicals might be confirming my fundamental view.
For seven consecutive weeks since the October swoon, the market -- which had risen until recently -- had not undergone two consecutive down days.
"I mean, whatever kills you kills you, and your death is authentic no matter how you die." –Jerry Garcia
That streak has been broken -- with a vengeance.
This week brought three down days in a row and a rapid rise in volatility -- the CBOE Volatility Index (VIX) registered at its highest level in two months. The week also featured the first 90% down day since early October, more NYSE new lows than new highs for five consecutive trading days and the worst weekly loss in 60 days.