{"id":1627,"date":"2014-11-15T11:58:47","date_gmt":"2014-11-15T16:58:47","guid":{"rendered":"http:\/\/olduvai.ca\/?p=1627"},"modified":"2014-11-15T11:58:47","modified_gmt":"2014-11-15T16:58:47","slug":"charles-hugh-smith-the-rubber-band-is-stretched-will-it-break","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=1627","title":{"rendered":"charles hugh smith-The Rubber Band Is Stretched&#8211;Will It Break?"},"content":{"rendered":"<p><a href=\"http:\/\/www.oftwominds.com\/blognov14\/rubber-band11-14.html\">charles hugh smith-The Rubber Band Is Stretched&#8211;Will It Break?<\/a>.<\/p>\n<p><span class=\"Apple-style-span\" style=\"color: #404040; font-family: Verdana; font-size: small; line-height: normal;\"><i>A rubber band can remain stretched for some time, but it takes some force to keep it stretched.<\/i><\/span><\/p>\n<p><b>The consensus is anticipating a smooth sleigh ride for Santa&#8217;s traditional stock market rally from November to year-end.<\/b>\u00a0But the rubber band of the current rally is looking quite stretched, and there&#8217;s a distinct possibility the rubber band snaps and Santa&#8217;s rally hits a rough patch and overturns, distributing lumps of coal rather than additional equity gains.<\/p>\n<p><b>Exhibit 1: The Russell 2000 index (RUT).<\/b>\u00a0It&#8217;s hard not to notice that MACD is about to cross in a bearish signal, and that the stochastic has already crossed and is heading south.<\/p>\n<p>Then there&#8217;s the open gaps below, which tend to get filled despite endless claims that &#8220;this rally is different.&#8221; Yes, of course it is.<\/p>\n<p>At the previous top, the RUT noodled around in a trading range for a couple of weeks, reaching for a breakout that quickly failed.<\/p>\n<p>The RUT has repeated the pattern rather neatly: two weeks of going nowhere (a.k.a. distribution), and a breakout that quickly reversed.<\/p>\n<p>It&#8217;s also interesting that the RUT&#8217;s runs seem to last around 20 days or so. The downturn in October lasted about 22 days, and the current run-up is stretched tight at 24 days.<\/p>\n<p><b>Exhibit 2: the volatility index (VIX).<\/b>\u00a0As\u00a0<i>Zero Hedge<\/i>\u00a0has noted, the VIX exhibits a peculiarity at the close of each trading session: it drops precipitously in the waning minutes of trading, and equally magically, stocks pop up to close positive for the day.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>charles hugh smith-The Rubber Band Is Stretched&#8211;Will It Break?. A rubber band can remain stretched for some time, but it takes some force to keep it stretched. The consensus is anticipating a smooth sleigh ride for Santa&#8217;s traditional stock market rally from November to year-end.\u00a0But the rubber band of the current rally is looking quite [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1139,1142,1138,1141,1140],"class_list":["post-1627","post","type-post","status-publish","format-standard","hentry","category-economics","tag-russell-2000","tag-rut","tag-stock-market","tag-vix","tag-volatility-index"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/1627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1627"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/1627\/revisions"}],"predecessor-version":[{"id":1628,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/1627\/revisions\/1628"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}