So, here I am, mostly minding my own business and accumulating my chosen stocks on weakness. Most folks tell me that I’m crazy to buy anything because the market “has to go down”. After all, everything sucks and a double dip recession is assured. Nevertheless, I continue to accumulate falling knives and otherwise “left for dead” stocks of many ilk.
Before you knew it the market rallied and kept going. Maybe it was good earnings or maybe the computers got too bearish. Maybe they thought there would be a new round of free money from our friends in Washington because after all, a healthy stock market eventually means a healthy economy. Right Maestro? So there was no reason not to bid-em-up and anyone who hedged looked a little foolish.
The bid-em up crowd was happy to get back to the top of the trading range but there were still doubts about whether Uncle Benny would pony up. After all, it has been almost two years since the crash and a birthday present is certainly in order. But no wonderful gift arrived. We simply got a card bringing us “All Good Wishes for the Future” signed, Ben…There was no check…Boy were we pissed. We’ll show that putz not to bring presents to the party!
After one trading day where everything went down, the consensus is that we suck, again and that we have to fall big. So far we are holding at the first area of big support, right smack in the middle of our almost 4 month trading range. Now, it’s all up to the dollar. Can the Powers that Be manipulate it to go lower like they have for the past few months? How about some consolidation first to work off the vicousness of all that trending?
We should no longer be thinking about the heat outside but rather the cold winter approaching and the holiday season. We are coming into historically the worst time of the year and everyone is hedged and ready for the crash. As long a we remain in our range, there will be no crash or stupendous market-shorting opportunity, unless you think yesterday will be repeated ad-nauseum. It is possible, but doubtful.
Find what is testing its recent early July lows and buy them for the inevitable bounce back to their early August levels. That’s what the markets are giving us now and that is what we will take…No stupendous bullishness or bearishness. Just waiting for the near-term extremes that continues to be opportunity, and that will probably be nearer to SPX 1060 than 1080…
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