Monday, December 18, 2006

Bears and Atheism

I think my bear avatar is so cute, I just have to show it again. Particularly since we had some red today.

Before I start with the charts, I'm going to be an idiot and actually mention religion in this blog. Now, let me be clear from the outset - - this isn't about religion per se. It's about a parallel I've noticed. People seem to confuse metaphors with analogies quite a bit. I don't - - and the analogy is this: atheism is to Christianity as bearishness is to bullishness.

Why, Tim, what do you mean? I will try to explain without ticking off too many people.

Christianity in the United States is mainstream. Most people in the country identify with it. It has been the backbone of this country since its founding, and although certainly attendance at Sunday service has been declining for years, by and large it's a stable, popular base.

So is bullishness. By and large, people in America are bulls. They believe in the future. They believe in optimism. The growth of America over the past three centuries in testament to that. Bullishness works. Bullishness makes people rich. Bullishness is the American way.

And here we come to where the weirdos are. Where the freaks live. The atheists. And the bears.

Both atheists and bears are outside the norm. They are, generally speaking, frowned upon. They are not the mainstream, and deep inside the hearts of those who are in the norm is a secret wish that the doubters will be proved Supremely Wrong at some point. In the case of bears, that would mean that It Really Is Different This Time, and markets will go straight up for many years. For atheists, it would mean that Jesus himself shows up on the Today Show to announce his second arrival.

And this is the troubling part for me. See, I'm a good suburban protestant. I know what it feels like to be in the mainstream. Methodists and Presbyterians do OK in the suburban jungle in which I've grown up and thrived.

But recently the atheists have been getting a lot of press. I'm surprised Richard Dawkins didn't make Time's Man of the Year for 2006. Bestselling books such as The God Delusion are selling like mad.

And here's where the parallels click..........Richard Dawkins is smart. Really smart. And it's got to be just a little bit troubling for those who give it a few moments of thought that really brainy, thoughtful, deep-thinking people are atheists. Because it makes you wonder what "side" you really want to be on.

And so it is with the bears. I'll be blunt - - I think bears are a lot smarter than bulls. Bears tend to be the more thoughtful, cerebral sort. Given the ways of the world, it also means that bears tend to be Flat Broke. Just as atheists can rest assured that they will not elect anyone to the White House in the next hundred years at least.

It's frustrating to be a bear, just as I'm sure it must be frustrating being an atheist. Because you watch the mainstream prosper and thrive. And you believe in your heart that they are just dead wrong. And you're the outsider. You're the freak. But it's very tough to convince the crowd when you are so clearly outside of it.

Do I have a conclusion from this? Not really. I simply think it's an interesting parallel. I'm not tempted to jump over to the atheist side any more than I'm tempted to jump to the bullish side. So I live with being a stupid sheep and a brainy bear at the same time. The duality of man!

Are you still reading? Are you still there? Good. Then we'll look at a few charts. Honest to God.......

The market did what I wanted it to do today (for a change), which is push higher, get the bulls excited, and then dash their hopes. Nothing makes my day more than a disappointed bull. The markets were down across the board, particularly in the world of gold and oil. The MidCap 400 did not break above the horizontal line shown here, indicating a possible failed pattern.

The NASDAQ was especially weak today. Here we see the $NDX slipped away from its formerly ascending channel. Ta ta, naz.

The Russell 2000 is also failing its bullish ways. The relative strength continues to weaken and is heading below the 50 mark. I really like the way things are turning around.

And here is the S&P 500, the only stock index on which I own puts right now (and a disturbingly large amount). We see how the RSI pulls farther away from the failed trendline.

The last index is the $XAU, the Gold and Silver index. We have been watching this a while, and this is a closer view than the one I normally provide. There still is no cut-and-dried pattern here, but it is clearly weakening, and I would look for it to fall all the way back to its neckline, at least.

Although oil has already started getting weaker, it might not be took late to get on board FTO, assuming the emerging head and shoulder completes.

Google (GOOG) fell nearly twenty points today. There is absolutely no doubt at all from this chart that the former "$500 now! $600 tomorrow! Go, go, go!" enthusiasm is shot. Google is priced for perfection. This company is far too arrogant to just keep sailing.

HWAY looks like a promising short pattern.

And MEE, mentioned here many times in the past, is behaving as it should.

I've also mentioned TSO, which had a solid down day. Oil's weakness is benefiting many of the items we are watching.

I'll brace myself for the comments section, since I've strayed away from charts. But keep in mind I'm not advocating a religious position here at all. Although I admit to proselytizing the Church of the Bear without shame.


Anonymous said...

no comments as yet so I will throw in 2 cents
This from an athiest
I believe that we are all athiests, deep down and I give you who are not, this to think of

when you understand why you don't believe in all of the gods, then you will understand why I don't believe in yours

Anonymous said...

Tim - excellent article. Of course there is no God, we all know that. But the politicians love God because that is how they can continue to "maintain" law and order through the same fear that has been used through the ages. Religion was once the State, and that is infact how the whole thing started. It's quite simple really, but I am ashamed to say it is amazing how grown men and women still believe that crap. Anyway, I am neither a bear nor a bull, I just follow God (nature/markets). I am part of this nature, I am the market myself, I am God!

David said...

Very interesting analogy ... The funny thing is that I'm a bull for at least one of the same reasons I'm an atheist: the tape.

In the same way that Christainity gives me a bail-out, get-out-of-Hell free card if I change my mind at the last minute, I'm comfortable being a bull up until the last few moments of the next nasty negative divergence!

Anonymous said...

my money is that the xau has bottomed today or tomorrow based on a pretty significant breakout that occured last friday when gold sold off strong but the xau hung in there and eclipsed the pivotal threshold of .23 on the xau:gold ratio. pull up a chart of the xau/gold ratio and you will see what i mean. every single time the xau breaksout above the neckline of the previous highs (these set ups only happen a few times during the last few decades (1992, 2002-2003,2004-2005), it sets up the next gold run.

i would cover if i were you.

Anonymous said...

Today was a day for the bears but Im not getting to excited because I have seen this thousands of times in last 6 months, rallies fade to losses and eventually within 1-2 days the market is back in rally mode closing at record highs. Seeing the dow down 4 was nothing to get happy about but the nasdaq, now that felt great.

Tomorrow we get housing numbers and PPI. The housing starts will be difficult to judge but anything inline to slightly better will cause a rally in the homebuilers. IF PPI comes in like the PPI wallstreet will be happy yet again.

If both come in perfect expect another record close on wallstreet tomorrow.

Trader 2006.

Anonymous said...

Great work Tim! I am incorporating your thinking into my trading which you can all follow at

I just made my first successful trade that is posted on that site. I have been trading for 6 years but only recently started publishing my moves LIVE for FREE on the blog mentioned. Rule #1 is FOLLOW the TREND !!!

Anonymous said...

4:10 you think SLV bounces back to 130+ this week?

TRADER 2006.

chronictown said...

this is world is justing spinning with no purpose or creator? I think not....

PB said...

The divergences keep piling up, and the market hasn't cracked yet. But the writing is now on the wall. Convert to a bear, or see your portfolio in hell!!!

Ballsy post Tim! You will sure get a lot of whino comments.

But the penultimate question is

WHAT do we mean by GOD?

In a nutshell, people would agree that it's a general good, rather than bad (in all it's permutations) That is why people would rather be bulls than bears. Bullishness is equated with positivity, goodness. While bearishness, well, great depression etc. You see humans want to be happy creatures enjoying the goods of this earth. That is why no one wants to deny God or bullishness. They are both good tending towards good.

MERRY CHRISTMAS and Happy Chanukkah to all the bloggers here!

Anonymous said...

I'll drink to that! Great blog!

mike said...


I'm curious about something. Are you a bear given where we are in the economic cycle and/or your belief we will have a major pullback - after which time you will be in the bullish camp? Or are you forever a bear? Curious as to how your categorize yourself since the only time you've had the blog you've been bearish.

Leisa said...

Tim...very appropriate analogy. Having the courage to think for one's self is an admirable trait, for it takes real fortitude to be swimming upstream against mainstream. Einstein's scientific colleagues wrote a petition denouncing his theory of relativity and proclaiming him some derelict. Thankfully he didn't care (but it's worth noting that he thought that quantum physics was a fad!. Your post compels me to did out Jose Ortega Y Gasset's, Revolt of the Masses. There's a wonderful quote in their about "mass man" that you'll enjoy. Maybe not. But it was nice to be reminded of it.

Leisa said...

P.S. I should proofread better, but it has been a loooong day. I'll proof better in the future.

Idaho_Spud said...

Longtime lurker, first time poster. I completely understand your feelings with regard to both bearishness and athiesm.

Anyway I certainly relate to your thoughts on being a cerebral outsider. We had roughly the same thoughts at the same time. Here's what I posted yesterday after reading an article on Yahoo about most popular searches:

Anonymous said...

Atheism is for cretinous troglodytes who also don't believe in Zeus, Apollo, unicorns, the tooth fairy, and the Flying Spaghetti Monster!

Silly atheists!

Bearishism is ... not a word.


Jack said...


I admire a God believer and a bear activist. When you are market right as a bear, you win big and fast.

But if you are wrong about God, it takes a nano second plus a lifetime to find out.

While God offers love and mercy, the Bear only loves the wary not the foolish hopefull bull who needs three times the time of his life to make money while the bear gets his in one third the time.

So to Christians, bears and bulls, you all can be winners but pray for the atheist who must face the final judgement of a merciful God.


Anonymous said...

"Are you still reading? Are you still there? Good. Then we'll look at a few charts. Honest to God......."




Anonymous said...

1% drop in China/Japan tonight, drop in tech stocks, vix up like 6%, gold down near lows, oracle dissapoints, tech selloff to some defensive stocks, maybe some smart money sees the top...

Brian said...

Come on Jack, let's leave the hell-fire out of this.

Tim -- as a non-believer (raised in a devout protestant family) I'm quite flattered by your analogy, and can appreciate dissagreeing with what seems like the whole world at times.

I also love your blog, but I must say one thing -- we could argue about the existence of god, but the recent rally is unarguably the best rally in quite some time. When my longs were all stopping out in Spring 06 (coincidentally when I started reading this blog!!) I went short and it turned out quite well. When my shorts were all stopping out June/July I started going long...that's been a bonanza! I really do love your blog and think you're among the most witty, and astute technicians out there, but I think your bear goggles have caused you to miss out on a gigantic rally....though the true Bear reckoning may yet come, but why not ride the bull until it does?

I'm just trying to be objective and follow the market as best I I'm starting to pare back on my longs, but the few shorts I've tried have all stopped out lately, so there may be some (albeit a little) juice left in this bull.

z-stock said...

You want some religion. LLL got nailed to the cross today. Look for more bleeding in the days that cometh. BOL parts the water at 54/56.2 ,then drowns. BOL acting like a recovering housing stock. Thus the 56.2. C acting like GS wanna be. Dead C at 56.
Mee Mee Mee, might rise from the dead, after three days.

Uncle Jack said...

Merry Beary Christmas!


traderb said...

"I'll be blunt - - I think bears are a lot smarter than bulls."

There are more fools among buyers than among sellers

- French Proverb

LBM said...

I see a new book on the horizon. Zen and the art of stock Maintenance.

Tim Knight said...

"I think your bear goggles have caused you to miss out on a gigantic rally....though the true Bear reckoning may yet come, but why not ride the bull until it does?"

Good comment, Brian. And you're right. My doctor says I am afflicted with premature anticipation dysfunction.

Rich said...

Richard Dawkins often says something that goes like this:

"You're all atheists about Zeus, Thor, and all the other gods. I just go one god farther."

Here's a Sam Harris video I stumbled on yesterday at YouTube.

Anonymous said...

I am thinking about covering my QQQQ short position...but I wanted to get an opinion from all of the atheists before pulling the trigger. Is this momentary sellof just a tease or the start of the big Fred Sanford like selloff?

Anonymous said...

this is sick sick market for bears.


nothing will bring down market.


~ Nona said...

There are two possibilities: either we will have a bear phase soon or we won't. (I won't define "soon".)

Likewise, there are two possibilities: either there is a God or there isn't.

I believe and, what's more, trust in, a merciful God. That said, trying to prove the existence of a being so powerful, so mysterious and so unfathomable is certainly beyond science, and, at a minimum, is (properly) a province of metaphysics and philosophy.

I'd like to object to something that I call dueling brains, i.e., so-and-so, who is really brilliant, is an atheist, therefore, there must not be a God. After all, two can play this game.

There are great minds who believe (or believed) in God. Einstein did, for example. So did Aristotle, who defined God as the Prime Mover and the Uncaused Cause. Ditto Sir John Polkinghorne, former professor of Mathematical Physics at Cambridge but now serves as an Anglican priest.

Also, let's not forget there are many people with fine minds who were once atheists. C.S. Lewis comes immediately to mind. What's interesting about Lewis is how depressed he became when he realized that there had to be a God. That feeling changed, of course, but it was his predominant feeling immediately after he came to a belief in God.

A professor acquaintance tells me he felt the eame way when he realized that his lifetime atheism was no longer tenable. And, yes, he got over his (temporary) depression.

Not as well known is former atheist Alister McGrath, a molecular biophysict (Oxford). He is now a deeply believing Christian and theologian, and graduated (with honors) in chemistry before following his completely unexpected interest in God. (The Twilight of Atheism is a recent book of his.)

Of greater interest to me is this fact: Dr. McAlister, who knows Richard Dawkins (they're both at Oxford), has repeated asked him to debate the subject publicly. Dawkins always declines.

It doesn't take stupidity to believe in God. Being open to wonder and mystery is probably the only necessary precondition.

Some bears have it; some bulls have it.

Anonymous said...

Tim; that was an awesome post! I agree, it's hard swimming against the tide of popular opinion and accepted truths.

In addition to being an atheist and a bear, I'm also a gay man in America. Talk about outsider! I keep getting told it was a choice I made...funny, I don't remember that day and I'm sure I would have.

anyway, this market is looking pretty tired to me; but as I type this they are pumping it up one more time. Time will tell...on all of it.

Anonymous said...

I think god may be punishing all the atheist bears end of day.

As a Christian I've been sitting in purgatory (cash) for too long.

Even Charles Darwin, the father of evolution, after putting it all together, died a Christian.


eat the bears said...

Here we grow again!

A feast - 100 point DOW reversal!

Eating the DOG today - lovin it again.

Listen Bears - Stop selling and shorting bad news..

OK just stop it.


Louis said...

Free thinkers are as rare among intellectuals as ones who "knows" are so among sunday crowd. Ahhh... Intellectuals, if only they can realize those were his hands that built ideological fortress around them and throw the keys away, vowing to defend their thoughts with their life. God belivers...,just as fierce defending God(their projection of God, to be accurate). So does it really matter which side you are on? Or is it the rigidness, lock the door, throw the key away, shoot whatever walks in the door, more life threatening?

My spelling sucks, grammer sucks, many apologies, in advance....sorry.

Anonymous said...

I wouldn't take Richard Dawkins too seriously. He is kinda like Ann Coulter, the ultra conservative blonde we see on tv so often. They tend to be outrageous to get attention and to sell more books. The "smart money" do not take them seriously, but the "dumb money" does and buy their books.

Don't believe the Bible because it was written by men to control men. But do believe that there is Universal Intelligence - "God" if you will. The creationists are correct believing that there is universal intelligence. Universal intelligence (God) can be observed indirectly. Look at everything around us. The living plant, the planetary cycles, equations in physics, are observable events that cannot be due to randomness. There is order, and where there is order there is universal intelligence at work. There is just no way around that. The truly most intelligent people on the planet do believe in a God, such as Isaac Newton, Albert Einstein, Stephen Hawking, and many others. Very few of them are creationists in the strictest since; in fact, they do not believe in a Biblical God but they believe in a Universal Intelligence that is manifest throughout the universe. Where the strict creationists (the church goers) run into problems defending themselves is when they start introducing the Biblical God. The creationists have enough common sense to realize that it is impossible for pure randomness to run everything around us. But they don't have enough common sense to realize that much of the bible was written by men to control men.

That's how evolutionists like Richard Dawkins can argue against the creationists and can stand a fighting chance. The evolutionists like Darwin and Dawkins are correct about their evolutionary theories. Most people who believe in Universal Intelligence (God) would agree that evolution is responsible for the origin of different species. (Most creationists also agree. Again, where the creationists get in trouble is when they talk about a Biblical God.) Between Charles Darwin and Richard Dawkins, Richard Dawkins is very limited in his thinking and a little bit confused because he's mixing evolutionary theories with creation of life, whereas Charles Darwin never did. What Richard Dawkins (please don't confuse Richard Dawkins with Stephen Hawking, who is alot smarter than Dawkins) doesn't realize is that evolution explains the ORIGIN of species - that is how species came to be and how they evolve, but evolutionary theories (as proposed by Darwin's Theory of Evolution) were NOT meant to explain how a living being came about! Evolutionary theories as proposed by Darwin explain how one species can end up creating a NEW SPECIES thru natural selection. Even Charles Darwin himself shied away from talking about the origin of a living organism (as opposed to a species), because he knew he couldn't explain it with evolutionary theories and without introducing some form of Universal Intelligence! Charles Darwin knew it would totally confuse the "scientists" if he did, and likely his theories would not have been accepted. To this day, our school system have altogether neglect the discussion of how a living being came about. Instead, our biology books make a one liner claim that somehow we were created by all the inorganic elements somehow randomly bumping into each other for millions of years in some sort of "primordial soup". Bunch of jokers!!! lol... Common sense, probability/statistical theories, and the physical sciences know that is a total impossbility.

The creationists are half right (because of their biblical god) and the evolutionists (because of their confusion in what evolutionary theories can and cannot explain) is also half correct. Like everything else, the truth is somewhere in the middle.

Evolution and Universal Intelligence (God/Mother Nature) are not mutually exclusive. Universal intelligence is expressed in the cycles of the planets, in every living being, in the inorganic elements, laws of gravity and inertia, in evolution, in everywhere. Go with Stephen Hawking and Albert Einstein! Their life's work eventually allowed them to appreciate Universal Intelligence. Don't go with Richard Dawkins, who is just plainly confused.