this is a classic bear market. big one day drops followed by big gap ups that sell off or give it back the next few days. i have been telling everyone, i expected a drop to 10k or 9800. this is uncharted terrioty with the downgrade, slowing economy,and a credit crisis in europe.
Well, then I bet you backed up the truck and are 100% short. Let me know how you spend all the money you make with this bear market/short certainty call? good luck
Your reads are not good. Overall market is very cheap, this is just a seasonal sell off. P/E's are so cheap the buyers will jump back in the minute it feels safe.
this is not just "a seasonal sell off". also, i am not short, i am on the side lines wating. i no longer engage in short term trading. i got hammered BEFORE the credit crisis. no more day trading for me !
because seasonal sell offs dont come with the S&P downgrading the US . because seasonal sell offs dont have unemployment at over 9% because seaonal sell offs dont have a credit crisis in europe because seasonal sell off dont have 1 day drops of 600 plus points i'm sure someone else can add a whole lot more.
August 2010 - Was it a seasonal sell off ? Check back in a few months. Your checklist will still have the same answers but markets will likely be higher. It wasn't long ago that Caterpiller/IBM/Apple were reporting strong earnings and outlook and their stock prices were running up. Would you really, truly be surprised if 2011 ended up being almost identical in nature to 2010 ? I wouldn't be, we can't know for sure, but I think the odds of a rally are much higher then a big further decline.
All but the downgrade have been going on for a year or more with no downward pressure on teh market. S&P downgrade was jsut one companies' opinion. It does not change any fundamental state of the US. 600 point sell-off was panic / uncertainty driven. IT does NOT indicate a further extended bear market. Crisis in Europe is nothing new. S&P has never downgraded the US, so how do u know seasonal selloffs don't come after a downgrade ?