A Lousy Day, Could of been Worse

Well it was not a fun day, and the markets broke important support today. Unfortunately, the big name tech stocks were not really that weak so until they fall you can't really call a 'bottom'. Cisco (CSCO) while reporting good numbers, is still down 3%. So we could be in for some more pain tomorrow, although the next level of support for the S&P is in the 1440s/1450, which is not that far down from here; less than 2%. Fund wise I was happy with today since some of the top names held up well all day, and I've been able to outperform on the upside the past quarter and still not suffer too bad on down days. In fact today, the fund beat the S&P500 by >1%, so I continue to pull away from the index. Only problem is I entered the day with 10% cash and more short ETF exposure than I have now, so a downturn tomorrow will just throw the fund into the sea like everyone else. But that's ok since I have been able to buffet most of this move down and we should be closer to the intermediate term bottom here... but there could be some ugliness ahead.

S&P topped out at 1553 five sessions ago, and we already have dropped 5% in just a week. Once again the down times in this market are very swift, and violent. If we continue down the next stops are 1440 and 1430; and at that point you'd expect to see people fleeing the teflon stocks. August lows were 1410, except for that 1 afternoon where we spiked down ahead of the Fed surprise discount cut (and we hit 1370 ever so briefly).

So the market got everything it wanted, Fed cuts, discount cuts - unfortunately it was too busy celebrating to realize there is a reason the Fed is cutting ... a derelict financial system and slowing economy. As I have been saying for months; it only matters when it matters.

I do really like the long positions I own, but if we enter another "August" type of period it won't matter what you own. Let's see what S&P 1440-1450 brings us - one step at a time. I can only imagine when the bulls start whimpering for a surprise Fed cut to save their hides. ;) (free markets and all) They just want the same drugs that got us here in the first place in 2002-2003.