Nowhere To Run

Good Morning. The turn of the month is usually a seasonally strong period for the market, which starts later this week. If the market gets oversold into the end of the week, we could see a bounce going into the beginning of the month. This would probably coincide with the 1040-1060 area that I believe is the most likely first stop in this correction. However, if we see large secondaries from the likes of Citigroup and Bank of America all bets are off.

Yesterday, I wrote about how everyone was scurrying into technology stocks. BIDU spit the bit last night and is down over 18% in the pre market. It will be interesting to see if the damage in technology is contained to this name or if the other horsemen are hit up.

2 comments:

MarketCynic said...

I agree that we should sell off some more but I don't think the bounce will be as vigorous as past bounces. Actually, I think its likely we've seen the highs for the year. I believe we'll crap out in November.
As for secondaries, they will eventually weigh on the market. But their effect in the short term is a bit overrated.

Tsachy Mishal said...

Im not talking about small secondaries. Im talking about $10 billion secondaries from the likes of Citi and BAC.

I have never seen a market that held up with that type of issuance, except for this past Summer. However, that coincided with a period where people were under invested and looking to get longer. That is no longer the case.