Ever fight a bear? Neither have I, but from what I've read and seen on nature shows, they don't go down without a fight. And after seeing the market action for the last week with its swift 3% haircuts to the Dow (INDEXDJX:.DJI) and S&P 500 (^INX), the bears amongst us aren't quite ready to roll over.
It all seemingly started with some Fed meeting minutes that discussed the long-term status of quantitative easing; that was enough to wake the grizzlies. Then a couple of weakish flash PMIs and a potentially tectonic Italian election and presto! It's correction time, global equity market style.
But not to fear -- the bulls, Bernanke, and Draghi are here! Or at least they will be on Tuesday and Wednesday when both will likely speak about everything economic and market related. Maybe an interest rate cut by Draghi, maybe dovish Fed talk by Bernanke, maybe both, and maybe not.
The Wall ticks up a notch to twenty-three as the recent and long-awaited bounce in gold has some concerned that it is a dash to safety assets. Feels like we're in a risk off and on period now, so get loose, be loose and stay loose because staying cool in the pocket is the only way to handle market volatility.
Click on the image below for an interactive version of this week's Wall of Worry, or scroll down for the text-only version.
QE: A mere hint of the party punch bowl being taken away and market guests dash for the door.
US ECONOMY: The latest figures say it's improving. But as Grandpa Max used to say, "Figures lie and liars figure."
UNEMPLOYMENT: Spain's overall rate tops 26% and their 16- to 24-year-old demographic tops 55%. Youth may be wasted on the young but in Spain jobs are not.
INVESTOR SENTIMENT: The bears grab the wheel, hoping to jerk the market into the breakdown lane.
HOUSING CRISIS: Spring selling season starts soon. I wonder if there is an alliteration season?
EUROPEAN ECONOMY: The EU nations to Draghi: "Scotty, you've got to get me more maneuvering power!"
CONSUMER SENTIMENT: Can the US consumer hold up to the one-two punch of higher gasoline prices and the end of the payroll tax holiday? February numbers should tell us.
SOVEREIGN DEBT: Panic time in Spain and Italy? "Not again…"
SPAIN: Kind of like one big Florida circa 2009, but without the rest of the United States to prop it up.
VOLATILITY: After a long calm, the current daily 1-2% swings feel like last year's 2-3% moves; kind of getting that cruise-ship-in-a-storm feeling.
(More from Minyanville: Take a Look Inside the Goldman Sachs Catamaran.)
HIGH FREQUENCY TRADING:
Lloyd: Some nasty market action lately.
HAL: I know. I finally got a restful night's sleep.
CHINA: Latest flash PMI was a bit soft. As all of our heads will be if China doesn't hit the economic gas pedal pretty soon.
ITALIAN ELECTIONS: Holding our breath possibly to be followed by holding our heads in our hands.
GLOBAL ECONOMY: Expectations for 2013 keep coming down as markets keep going up. There's always 2014, right?
SPENDING CUTS: I'm hearing the faint howl of Simpson-Bowles 2.0 in the wind...
JAPAN: Abenomics lets the good times roll! Or perhaps just gets them started.
GOLD: Showing signs of life, which in the current environment is interpreted as potential signs of death for equities.
DRAGHI: States that economic growth risks are still "skewed to the downside." Let's hope he never has to change that first word to "skewered."
(More from Minyanville: Where Apple Stock Is Now, and What Levels Are Worth Watching.)
EARNINGS SEASON: A few more stragglers left to report.
SEQUESTRATION: Unless cooler heads prevail soon (read:cooler heads with brains in them), the cuts are coming swift and hard. Might just be the only way to get us back on track.
US CONGRESS: Can someone give these folks some PEDs or deer antler spray!
US PRESIDENT: Got control of the wheel of the US economy car. All we ask is that you please keep us on the road.
THE EURO: Weakening lately. Hey, Spain and Italy, have any idea why that may be?
(More from Minyanville: Is Your Smartphone Making You Stupid?)
What Is Lloyd's Wall of Worry?
by Lloyd Khaner
Welcome to my at-a-glance guide to the issues facing investors this week -- a unique tool for traders and money managers.
Typically the term "wall of worry" refers to the entire body of concerns influencing stock market action. When the wall is high, meaning the market is nervous, stocks tend to get cheaper.
This wall of worry is even more specific. Every week I list the exact concerns in the marketplace and use the list to help me make buying and selling decisions. As I like to say, "Buy fear, sell cheer."
In other words, once the the wall rises above 15 blocks, start looking for deals. If the worry count sinks below 10, consider selling; prices have likely peaked.