The market was speeding ahead as fast as it could, up until it rolled over a sharp nail. Now we’re deflating and it won’t be long until we stop completely and collapse — unless of course we get some bad news to trade off from and provide us with some more air to keep the dream alive.
Since I entered heavily hedged, I’m actually flat for the session. Normally I’d close out my hedges and hope for the market to turn and I might still do that. In the past, buying all morning dips was a good idea. My sole reservation is that the market was already up too much and now we have some concerns about earnings.
MSFT had been up 5% after posting results and now the stock is down 4%. NOT GOOD.
ON THE OTHER HAND, we are also seeing rotation out of growth and back into risk averse stocks like SJM, MCK, and LMT.
BOTTOM LINE: we knew it was overheated and now we’re being tested. If we are in a true bull market, we will recover. Pick a side and good luck.
More later.
If you enjoy the content at iBankCoin, please follow us on Twitter
