It does not make any sense from an economic viewpoint but the market is not the economy. (although in theory corporate profits are tied to the economy but that's a long term view, in the near term anything is possible to create a move). As long as market participants are confident in a Federal backstop, and the coming multiple rounds of homeowner bailouts (we have one ready to exit the Senate today but I believe it will be the first of multiple ones) - we can rally. This is what we did in late August 2007 - when the financial issues were labeled "subprime only" and "kitchen sink" - that was proven wrong but it did not matter - we had a massive rally on faith in the Federal Reserve.
Extremely tricky action - and all derived on where the pendulum of hope/socialistic actions versus economic degradation falls each day. If tomorrow's report is not lights out scary I still have to remain short term constructive and follow the herd into nirvana of "everything will be fine in 6 months". But was Uncle Ben's admission of potential recession yesterday a sign he saw what was already coming? (He gets the numbers early). Even more tricky of a time with a plethora of earnings reports coming out, in which each day we will go from "the world is ending" to "nothing to worry about" based on that specific day's slew of reports. What can I say, this is a market that wants to go up and begin embracing risk. But it can literally change with 1 economic report... but if tomorrow's number comes in even "ok" we have to be even more bullish for the near term. A drop below S&P 1350 would change my mind, but for now Kool Aid is my drink of choice... (subject to change at 8:30 AM tomorrow of course) I'd like to see a move above 1390 or so to confirm this (ahem) "bull".
4 comments:
I drank some of your Kool Aid and liquified my shorts. I agree, the market feels different. None of the bad news is being absorbed like it used to.
Welcome to the pool. The Kool Aid's great in here.
Those sharks? Don't mind them. They live in an alternative universe called reality. They won't bite.. I promise.
I'm still concerned about that 1400 and 1450 range. It's at that level, that I want to start to place some bets on the multinational/mainstreet divergence thesis. But for the moment, i took a swig too. I wish you could short for your Fund Mark. It would be great to get your insights into those areas too.
Yep, you can search the blog for restaurants and retailers all fall. Some names I pointed out lost like 70-80%
Others only lost like 50% :) Coach, Harley, Ralph Lauren
Ruby Tuesdays was one I really wish I could get.
I really think many restaurants are sunk... even worse than retailers. At least retailers dont have huge rising input costs combined WITH the slowing consumer. I expect a lot of restaurants closing as they wont be able to pass costs along and get squeezed.
More business for MickeyD's
I do most of my trading in my retirement accounts so I cannot short individual names there either... but thankful for short ETFs... didnt have them in 2000-2002 when they would of come in a bit handy
I am hoping the market makes a jog to 1420+, suck in the bulls, the "bottom is in crowd", a "new beginning crowd" and then we the bear can chop off their heads on the way back down. ;) But probably won't reach new lows with all the liquidity out there - probably a long range bound bout of sideways in a wide range.
Just guessing.
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