It would be most unbecoming of you if you take this breather to try and be a hero.
In real life, Achilles does not ride to the gates of Troy and, after challenging the city’s favored son to a death bout, ride away victorious with his dead quarry dragging behind him.
He gets a volley of arrows into his chest and dies looking like an idiot.
This is a most opportune moment; one which you could be using to correct the errors which were made into lessons over the last three days of trading. If we continue to sell off from this feeble bounce tomorrow, will you be more resilient and defended than you were before?
Or will you be one and a half times more levered because you tried to catch a two thousand point sell-off/locomotive with your teeth?
I have already increased my UCO short further. Continued weakness or disappointing comments from the Fed this afternoon will result in an immediate death sentence for equities and commodities alike.
Let me also bring it to your attention that we have no idea what is causing this selloff. Is it just ruined expectations? Or is there possibly some massive form of exposure across the system that is sending it spiraling into the ground (repurchase agreements, anyone)?
In real life, you never have some narrator telling you how the MBS contracts are blowing up and that’s what’s causing the crash. It is never that easy.
Those stories are written in hindsight, after more information is known. If you treat every sell off like a standard correction, and ignore the possibilities of more dire variables dragging things down farther than you ever imagined, you will lose your shirt many, many times before you die.
Frankly, I doubt we are seeing the worst selloff in years simply because quantitative easing is temporarily off the table. There is too much room for more extreme causes driving current events.
If you question that statement, please review a graph of the last three days. That sort of gargantuan movement does not occur from a mere sour outlook on the state of affairs. It does not come from short selling either. It comes from forced selling.
So what is causing the forced selling?
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Wise words. Hedgefunds does not liquidate in one or two days. It takes a week or weeks to get out of large positions. I sold out of all stocks bought yesterday. Nice bounce 15 point on $AAPL. You dont buy a stock up 15 point you sell. All cash here. It might be time to find your old Dow 10000 cap and dust it off.
If true (Black Swan) then the Fed would be forced to react to something they know that we don’t …. just saying.
That is not at all what played out in the last recession. The potential exposure from derivatives as it pertained to financial institutions was generally misunderstood by even the Fed up until it began to be a real problem. AIG had to practically shoot Geithner when he was head of the Fed to get him to pay attention to them while they were busy trying to help Lehman Brothers out.
And if that exposure lies outside the jurisdiction of the Federal Reserve; say, in Europe? Well then there might not be anything they can do.
I think my point was proven by the inaction from the fed and the ensuing rally, no?
Time will tell.
I would think for UTES and REITS that pay dividends, this would be great news; of course, the quants trump all.