A diary of the thought process behind my investment decisions
Depends on the close...we close at the lows we either start lower then a reversal or go higher.If we go up from the lows at the close today. Say only down 1%. Then i would expect selling Wed in advance of the employment news.
There's been bad news every night, so it's unlikely we'll have no bad news tonight.That said, I think there may be some tension tomorrow from the expiration of the ECB's 440 bn euro bank lending facility Thursday. So down is possible. On the other hand we're at the support level from which the S&P has bounced many times since May. It seems unlikely we go through on the first test, but will probably go through within the next week.My guess is that tomorrow we bounce along the same level we're at now, before a small relief bounce Thursday, with Friday's payroll data looming. But I have low confidence in this prognostication. I'm just sticking with my shorts for now.
If you put a gun to my head and forced me to choose, I'd say up. A big leg down is usually followed by partial retracement. But the long term trend is down, and that trend is gaining momentum. I think it is madness to try playing these tiny bounces. Put yourself in a short position at the next good opportunity, then just step aside and wait patiently.
If no news then it will follow trend so it will go down tomorrow again.
Bring on the pain
Today's action has been even more lackluster than the previous days, after the drop. We go lower regardless of the news, or lack thereof, and then interpret any news in light of the market's further weakness. As per the usual.
And here we go!
I would add that even if the SPX bounces, I would expect the small caps and risky stocks to go down. SPXEW/SPX ratio will fall as people rotate out of riskier stocks into defensive names.
Down over 8% in five days? Would have to go with higher with a gun to my head. But I am not in it for tomorrow or the next day.I would look to sell any rally that did show up, not buy trying to predict it. But I am overwhelmingly bearish from a fundamental perspective so the long side isn't even a remote option for now.JD
That 1036 a few minutes back was the time to buy the dip. But like I said earlier, I think it is madness to play these bounces with a strong downward trend in progress. There is so much negative potential out there:a) protectionism is coming. b) unpopped housing bubbles in China, Australia, Canada (Vancouver especially)c) commercial RE--don't hear much about that, but it is a trainwreck.d) long-term demographics are a problem, boomers have to sell their stocks eventually and can't really take big risks buying more stocks, given how close retirement ise) boost in profits is due to cuts in wages, those will boomerang and cause cuts in revenues down the road as workers don't have money to spendf) greece can't pay their debt, only a matter of time before they default and blow up the euro.On and on it goes. There'll be a time to go long equities, this isn't it.
Down opening with a fair chance at a reversal to the upside if the action is very ugly early.
I took my 16 year old daughter to Paris last week for a short vacation. The French went on strike on Wednesday and so we didn't go out to Versailles because their tour guides are unionized. The irony was palpable.......Europe is so cooked and they are going to take down the US with them........
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