I have been short on Lululemon (NASDAQ: LULU) since it was selling at $55.30 a share back in October, 2011.  Today it fell almost $15 to close at $67.85.

You get my point.

I feel much the same way about the current market.  A correction is due, but the liquidity from global central bankers is keeping it afloat, despite today’s plunge.  As John Maynard Keynes once noted, “The market can stay irrational much longer than you can stay solvent.”

All three of the major stock exchanges were down today.  Even gold (NYSE: GLD) fell. That makes no sense: if the stock markets are down due to concerns about economic growth, as happened today, then gold should have closed higher in its capacity as a traditional safe haven asset.  But as the chart below shows, the GLD was down; as it has been for the last week (-1.46%), month (-4.55%), quarter (-13.58%), six months (-19.32%), and year (-13.75%) of trading.   For 2013, the GLD has plunged by 17.76%.

And oil should be falling more, due a lack of demand from economies around the world.  The biggest economy, the United States, just had its unemployment rate increase to 7.6%  According to Carl Weinberg, Chief Economist for High Frequency Economics, Europe is in a depression and Japan is close to that state of economic affairs.  But the main exchange traded fund for oil, United States Oil (NYSE: USO), is up almost 2% for the week.

As the chart below shows, there are very bullish candlestick patterns for the USO in recent market action.

All three of the major stock exchanges closed today with very bearish technical indicators (charts below).  Bearish sentiment is now twice that amount for the bulls.

Last week, Esther George, President of the Kansas City Federal Reserve Bank, stated in prepared remarks that she favored cutting back on the $85 billion a month in Treasury Bond and mortgage-backed securities purchases due to improving economy.  One would think that a Federal Reserve Bank president speaking of a better American economy would send the Dow and S&P higher, but the opposite happened.

The markets fell due to a concern about lesser liquidity being injected into the economy by the Federal Reserve. Eventually should make its presence felt on a sustained basis in the financial markets as the Federal Reserve will have to quit expanding its balance sheet by trillions as it has been doing since 2007.  When that does happen, Lululemon and more stocks should be falling.