Hurricane Harbor

A writer and a tropical muse. A funky Lubavitcher who enjoys watching the weather, hurricanes, listening to music while enjoying life with a sense of humor and trying to make sense of it all!

Tuesday, February 06, 2018

Financial Storms - Stock Market Watching the Dow Jones is Similar to Watching La Nina and Wondering on the 2018 Atlantic Hurricane Season. Time Will Tell. It Evolves in Real Time... NFC Won the Super Bowl but the Market is Going Down? Hmnnn

I'm going to talk about the financial storm that hit us yesterday affecting people everywhere in all parts of the country and the world beyond. Watching the Stock Market and the financial world is much like watching the weather. A lot of maps and graphs are used to show what is happening in real time and to predict what might happen tomorrow; there's also a lot of graphs on what happened in the past. Also the Stock Market goes up and down in real time the same way a winter storm forms or a tropical wave begins to roll off of Africa and develop into a significant tropical wave and then an upgrade to Tropical Storm status appears imminent. Note things in the rear view mirror are often distorted in the short term and what appears to be happening may not play out exactly the way we hope or fear. I'll talk more on fear later...

Why the Market plunged yesterday is the big question today and worse than just one day it has been doing the Downward Dog Pose for the last several days since last week. My husband sent me several links this morning as it's a question I wondered on much yesterday. He's a Financial Planner and he as well as others are watching and wondering and many have their own thoughts. Is this merely an aspect of everyone fearing a "correction" and giving in to fear and selling when the market plunged yesterday the way snow begins to blind drivers on a busy freeway? 

When a Hurricane is making landfall the fear factor kicks in and people panic doing odd things such as evacuating out of a safe area in a well built home and get stuck on the road for hours when there wasn't really anything to fear. People jump on a plane and take a vacation to see Aunt Martha in Maine when Miami appears suddenly in the 5 day cone on the 5th day of the cone. People who swear they won't go shopping until there is a Hurricane Watch suddenly stop on the way home at Publix and spend $300 on toilet paper, bottled water and junk food while picking up a Publix Sub for dinner. Was yesterday's sell off in the market a matter of being so nervous about the coming "correction" that the fear factor took over and made a bad situation worse?

Only Thing We Have to Fear Is Fear Itself

The Eagles won the Super Bowl.
The NFC team won!!
We were supposed to see the market soar..
The Eagles did won but the Bear showed up?

Say it ain't so Tom....
The Market is supposed to fall when the AFC wins!
How could this happen?

Weather predicting is similar to the trying to see into a crystal ball what the Stock Market will do as wives tales and "sayings" are whispered about as random events are often thought to be indicators of what will happen in real life. You know those saying about how watching woolly caterpillars is supposedly a sign of a fierce winter waiting in the wings? Market analysts who keep a rabbit foot in their pocket are known to watch the Super Bowl nervously. As you can read in the article below football has often been seen as an odd indicator of how the market will do in any given year. The Super Bowl happens in the beginning of the calendar year and supposedly high scoring games bring a high climbing market. AFC wins are seen as an indicator of a Bear Market and when the NFC wins we all win or so they say. Well, that's been the often watched pattern by people who love to watch patterns as much as they love to watch the Dow and satellite loops. I suppose in any given year that rule can be broken.  Or this is just an odd anomaly in the way that a weak hurricane goes Cat 3 for a day and then falls apart again for the rest of it's run limping along as a Post Tropical Storm. What goes up must come down and then after the correction could be another correction.

sat_wv_east_loop-12.gif (640×512)

Well there was a lot of volatility yesterday.
The wrong kind though.

When they talk about the Stock Market they use words such as "barometer" while looking for a way to explain what no one can totally agree on and that is why the market reacted yesterday to what seemed to have no defining reason for dropping so dramatically. There has been much talk about a coming correction and I'd say we can definitely say that correction came yesterday during what had been a bull market for the last year. Bull turned to bear so fast yesterday it was as if it was a fast change artist in between acts of a long running play. And using the words "playing the market" is used for a reason as it is in a way a "game" of sorts however it's one of the biggest indicators of our economy and how our world works... how both our world and our money goes round. On days like today it's a "game" no one laughs about as they watch, wait and pray that it begins to climb again.

First of all there had been talk of a "correction" but no one expected this sort of diving correction out of seemingly nowhere.

To explain this in weather terms let's say it's January and it's obviously possible to get a snow storm in the Carolinas; but we had snow as far South this year as the Florida Georgia Line.  A forecast is made that snow will fall in the mountains and to the north somewhere between Greensboro and Raleigh with rain along the coast and to the South. The cold front begins to move and every meteorologist watches their radars and Twitter feed. Models showed the general path of trouble and the models recorrected themselves taking away that threat of snow for Wilmington and the coast. The flakes begin to fall or in typical Raleigh fashion the snow didn't fall and a clear donut hole formed around Raleigh on the radar as the dry atmosphere took longer to moisten and allow snow to fall. Reports of snow in Pittsboro begin to come in and then oddly reports of snow flakes falling in the Pine Hills to the South of Raleigh. Everyone gets really excited as snow in the Pine Hills is rarer than snow in Raleigh. But oddly the snow continued to fall in record amounts on a town that didn't salt the roads and isn't prepared to plow.

For children snow in the South is a game.
A game they win!
It also creates havoc.
Loss of life and financial loss.

We have gotten so used to being able to predict things be it the general movement of the Stock Market or just when snow will begin to fall and where and when yet weather like the Stock Market can suddenly become unpredictable sometimes for no apparent reason. In retrospect we can watch loops of what happened and see why Moore County got buried in an unexpected snow storm. It was winter after all  and it's been an active winter storm track in the South. It's not as if Hurricane Sandy formed down near Cuba and the next morning it hit Wyoming; it was reasonable to assume that it would move North and follow the steering currents and it could possibly affect the New York City metro area. Bull Markets have corrections and at times go Bear in the same way that La Ninos suddenly begin to look more like a Neutral Pattern after months of warm water expanding on satellite imagery. In the rear view mirror of research, maps, loops and shared discussion we understand what seemed to blind side us in real time.

Maybe this was a problem with computers and algorithmic trading gone awry. Today the Market opened and after a shaky start the Market seems to be trying to correct it's correction though it's falling again as I type this blog.... in real time. It's a good day to watch and wait and not panic; do not sell wildly and do not buy an extra pallet of bottled spring water because the predictions for the 2018 Atlantic Hurricane Season are coming in on the high side. Mind you if it's a really good deal and you have the room... you can buy canned food on a good sale.

Did I mention La Nina?

Is this an anomaly or a pattern?

The same can be wondered about the Market.

Is this a trend or a pattern?

Much like the weather... 
Time will time...

Was the record snow fall in Erie Pa such a big surprise considering they do get Lake Effect Snow and it was winter, however no one saw Santa Claus sending them a record snow fall this Christmas.

Yeah.... trying to figure out the the next week's weather is often harder it seems than seeing which way the Market is trending. Be calm, stay steady ... do not give into fear and wait a bit before doing anything you may regret. Was the fall of Bitcoin an early indicator of the Stock Market doing a nose dive? I wonder...

Besos BobbiStorm
@bobbistorm on Twitter

Ps.... It's going to be a long day for people watching the Stock Market.

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