The Market Is Lulling People Into A False Sense Of Security

Recently we have had a spate of people come out with bullish statements about stocks. I have a much different perspective.

Today, we saw two moves in the Dow of greater than four percent, one being up and one being down. The last being in the final five minutes heading into the 4:00 close. The long term return for the Dow is five percent a year not five percent in five minutes.

I'm going to show you a chart that most people would never look at. This is a one minute chart of the Dow from 2:30 today until the 4:00 close. In other words, each minute a new price is printed as opposed to a daily chart where a new price is obviously printed once daily. Notice on the chart how the market was unable to discover consistent pricing and there were two major gaps where the market moved very rapidly in less than a minute. This type of behavior is unprecedented and is very disconcerting. And, it has happened quite often recently. There is no person alive who has ever witnessed this type of behavior in markets. I believe it is a fool's game not to respect what the market is telling us. And, what it is telling us is how extremely dangerous it is.