by John Galt
August 23, 2015 17:10 ET
The world went into full hysteria mode last week trying to decipher the meaning of the Federal Reserve minutes on Wednesday, and selling off into the close on Friday with just under a 6% decline on the major indices for the week. Is this time to panic? CNBS doesn’t think so:
In fact few if any financial programs I took the time to watch or listen to (so you don’t have to) mentioned the words panic, recession, or bear market. Much like their counterparts in Europe, Asia, and the Middle East in fact the theme was to buy the dips once again and that “oh, this was the inevitable correction.”
Of course these are the same yo-yo’s who said to buy in June through August of 2008 just before a 50% crash wiped most people out. Who can ever forget the memorable financial honk’s calls to hold Citigroup to $1 per share and that Wachovia and Washington Mutual were solid institutions?
The problem is that for the S&P 500 and other broader market indexes we are not in correction territory yet:
In fact if one looks at a 3 year weekly chart of the S&P 500, the truth is that if the markets break 1820, then my intermediate (September-October) target is a distinct possibility:
Thus the drop in the DJIA while into “correction” territory might sound impressive, we are not quite there yet as far as any reason to panic:
In my opinion we will see some more downward motion the last two weeks of this month, barring anything geopolitical blowing up like Korea or the Ukraine, and in September as all of the stars line up, the serious damage will occur to the markets. In the mean time, enjoy the incessant BS from the talking heads on the various financial media who will try to convince the average sucker, er, schmuck that 2008, aka, 1987, can not happen again.
Until it does.