I tend to agree. I don't daytrade these names for the very reason that I was afraid of getting caught in a (downside) reversal. I'm just thinking about price and time. I would not be at all surprised if we sat around the 200-day in the SPX and then made new lows a week from now. These markets are clearly repricing themselves. The thing that people often forget about moving averages is that they don't change during parabolic up or down moves, but rather during consolidation. I see us at this level for some time. While I believe a relief rally is in order, a solid retracement, in my mind, is out of the question. I'll be looking at the jobs data looking for wage inflation. Essentially, we are still on very shaky ground and are highly data dependent. 11,200 in the Dow seems high if the FED raises .25, let alone .50 (and/or indicates further increases).
wonderful post, I agree totally.. The mkt has been trying to reprice the silly years for awhile..People look at earnings now and say the mkt is cheap beacuse of past p/e ratios.. At 14/15x next years earings this thing is cheap..Well, its not cheap.."The this time is different" crowd is always around at the top, and the upward moves tend to be most pronounced at the top.. Guess what? this is the same as 99/00 except in differnet asset classes...i.e real estate and oil, or steel, or most other commodities...Late cycle stocks are the most dangerous, and I think we just saw a classic blow off top in most..The mkt may tread wtr from here until october or so, but after that I am max short.
Frank - I agree, with the caveat that I DO believe that China and India are (at the risk of sounding like Cramer) where we (the US) were in the 1950s. BUT, there is a limit to pricing power. These companies are going to sit at these levels for a while and will spike up and down as data and earnings trickle in. My view, since I don't trade the commodity complex, is that I'm glad that they've come down and that now any moves in the indices will be more independent of companies such as HAL, SLB, GG, AHC, VLO, PD, et al. THAT to me, lays the groundwork for a genuine rally rather than a commodity balloon waiting to be burst. Tangentially, this is a good example of why the success of splits is often a function of time. AHC was planning a 3/1 split after the new name change (from AHC to HES). Betcha they cancel that! VLO wins the split timing prize of the year. 50% of success in life is pulling the trigger Why did AHC (HES) wait so long? The 140s were obviously a f-cking level.