Doesn't today feel familiar? Can you remember those corrections that you didn't even realize you were in? I know that sounds silly with so many sectors hitting new highs. The optimism now by money managers is all about PE expansion, it's all I here. Boy they were sure quick to throw the growth equation out the door. I think usually the first big move points the real direction so I paint this scenario what if Wed starts out good to flat, maybe down 20 on the DOW. Naz down 4 sort of open and then a strong rally ensues DOW gets up 40 Naz up 12.... and then when the S&P can't get through resistance a sell program kicks in and we finish flat for the day.... Thursday and Friday's action then takes out the recent low. Have A Nice Weekend! Will this happen? Who knows but that's where my thoughts are-- it's too easy now --
So far almost exactly as predicted and or feared, lower open strong rally turning over. I'm not wanting to get forced into selling any winners quite yet... 2:30 should be most interesting......
Stoney- Pay heed, that's your inner voice talking. Calls are rich puts are cheap. Fed meets next Tues. Despite what everyone may think option expiration starts today, watch the roll.
Is it just me or does this not look good?.... God forbid we don't have $8 Billion dollars in buyouts over the weekend and Santa will be bringing us the coal. Remember in the type of market I think we are heading into the opposite of what you would think will happen. I feel you hold your small cap in fact you hide in them... the big lazy boys take the hit and when the dust settles people are going to realize if you want clean 20 plus % growth in a stock you're going to have to think small.
Simple exhaustion I would think nothing more than that. Garden variety 5% top to bottom. The big problem that I can see RIGHT NOW is that corporate spending on tech has dried up like a prune. The consumer has already pulled in so this corporate spending is huge the money is being hoarded by companies to buy back shares shrink floats and keep there stock prices up. They simply are not paying up for cap ex. So the economy will really take the hit there I'm afraid it's just a matter of time, keep an eye on semiconductor inventory levels. Also there's lots of shenanigans going on in the pension plans and accounting for options and TRUE earnings for this market-they are in danger of being exposed. A lot is being put on VISTA's release this is supposed to be the cure all. That day of celebration for MSFT when they get the damn thing shipped that will be a true sale day for tech holdings.
I was betting on a pullback initially, but now that I look back at my mistake, it seems like the market is pricing in a 1995 type of move where there is a lot more to go without a pullback. It sounds impossible doesn't it?
Well the 1995 move was based off The Internet- probably the most transforming tech app of all time, there's nothing happening like that now. The market is doing it's soft landing mantra but I remember the last time around at it was sort of 0. something growth for one reporting cycle- that was about as slow as it got before a couple more GDP's in the ones...and still it hurt like hell. Stocks went down. Housing is big we are in a sweet spot for a few months - where things apparently have stabilized. So there's still lots of time for a nice rally before housing takes another leg down and freaks everyone out. When the next leg up? Soon; not now. Fed language on Inflation has to be unusually tough and perhaps they are proven right> the economy re accelerates (I'm personally betting on it I like Big Ben) But that leads to interest rate hikes resuming. At least then we would be in sync with Europe Last year we had that disquieting period when we were all waiting for the " new money " to come pouring into the market in Jan and it just didn't happen. This Jan could feel very much the same, especially as the whole Iraq mess will be percolating good when Syria and Iran agents are on the ground there, fixing things with one hand and helping plan even more deadly attacks with the other. Dollar meltdown scenario is very much alive and well, it would really take just one move by China to hold half of their assets in Swiss Francs or something to really roil the greenback, that leads to big hedge funds coming unglued very easily. Will Paulson have the guts Reubin did and know when the time is right to step in there and buy. It's a gamble. He seems to be hooked on the weak dollar being A-OK which I'm not into. My online account is up almost 30% for the year, at the first really good break of Mr. Market I might be running for the door. How many Hedge Funds will be there before me blocking the way? The question quickly becomes: Why Give Half Back if you don't have to?