We couldn't bust the whole pivot this AM, but I fear shorting would be met by artificial support. This could be one good collapse day if it were left alone.
I hope everybody covered their shorts, this bounce is for real and will last for several weeks at least.
Long at 1 point above pivot. Not too sure this will last for a few weeks though. The balloon is still deflating, what will blow it up??
An excerpt from http://www.dailyreckoning.com/ ...They're already brimming with the stuff. ICI, a mutual fund industry association, reports that 4.5% to 5% of stock fund assets are in cash. With total stock fund assets now at US$3.3 trillion, that 5% in cash amounts to about US$160 billion. That's it. To my mind the question is: with US$50 billion to US$70 billion a month getting yanked from mutual funds, how much more can the industry withstand before it has to start dumping stock to meet the redemptions? The answer is 4 months, tops. Then the demand for securities will drop even more. The wild card in this scenario is the fabled "fall rally" flitting about on everyone's lips. As far as the funds are concerned, there had better be a fall rally this year. Their very existence is at stake. Of course, the PR machines are already working on it. The other day I saw Condoleezza Rice on TV saying that the economy was much stronger than the numbers indicate. While that may or may not be true, what makes me curious is why the National Security Advisor is making speeches about the economy. Perhaps the potential for a financial meltdown is more of a national security threat than the administration would like to let on. In truth, a fall rally sounds pretty good right about now. The Fed and the Treasury will not want to see too many funds fail. And on that basis alone, I wouldn't be surprised to see stocks get pumped up for the next couple of months. We may even get a rate cut before the year is out... and another round of speculative excess as individual investors seek to get back to zero. But once the holiday season is done, and another round of liquidity gets sopped up, and the economy still hasn't rebounded, and war with Iraq becomes imminent, and profits still stink, and inflation begins to set in, well, maybe then we can begin to start talking about a bottom. Until then, beware. Regards, Briton L. Ryle, for The Daily Reckoning