Off the Cuff: Proceed With Caution

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish opine on:

• Market stresses galore
  • The markets are acting dangerously out of touch with both fundamental and technical indicators. What does that mean? And will the next break to be the upside or the downside?
    
• Europe
  • The situation continues to be a nerve-wracking tightrope walk. What are the likeliest outcomes and when are we likely to see some resolution? (Or devolution?)
    

To our commentators here, it smells like 2008 all over again, but the markets are shrugging off what should be a concerning amount of data. It appears that both fundamental and technical analysis can be tossed out the window now, for all the predictive power they currently have. Simply put, the markets are only reacting to whiffs of news of liquidity.

At this point, Chris and Mish are scratching their heads — and don’t think it is wise to be in this market. Both calculate that the risks to the downside currently outweigh those to the up. Both advise exiting until more sanity prevails and positioning oneself for potential re-entry at more rational prices if the markets lurch down.

Looking at current prices, it seems market players are already pricing in future announcements from the world’s central banks that they’re resuming quantitative easing (i.e., printing more ‘thin-air’ money).