Monday, October 13, 2008
Just What I Needed?
Nothing like a nearly a 1000 point up day for the cheerleaders on CNBC to proclaim they were right on the bottom or whether this and that happened the way they called for. Folks like Dennis Kneale and other bobbleheads that flip flop like a fish on a slippery dock will probably feel vindicated this weekend at their NYC cocktail parties that they "called" the bottom in Citigroup or they "knew" the VIX wouldnt rise further. But what purpose does this actually serve? None.
See Mr. Market showed the average Joe a painful lesson today. Sell into the CNBC induced panic last week and then completely miss the mother of all short squeeze rallies in the face of watching the very people on financial television who panicked you outta the market last week, cheer the market all morning long as if the world changed over the weekend. This basically proves that you cannot and should not sell into any sort of market panic. If you have waited thus far to sell whatever you hold, then youre better off holding off the panic button and waiting for the snapback rally that invariably comes everytime. You most always get a higher price to sell for if you wait, if getting out is your objective.
I've never seen CNBC go this fast from panic to euphoric over one weekend. Its really incredible that they call themselves "unbiased" on those commericals they produce.
I would remind you that we just had a 1000 point rally in the course of a day. 104 handles in the SPX. Which is just unheard of. We should take a breather Tuesday...hell maybe even lose a couple hundred points. *Gasp*. It would only be healthy for us to retrace a third or even half of todays gains. Some would say we need a confirmation day but I would argue that we had about 3 in one today, lol.
It does look like last Friday was some sort of intermediate term bottom marked by all the classic contrarian signals. But whether or not we race higher from here is another question. I doubt it. We still have major issues. The unfreezing of the credit markets would be one thing that can give this rally legs. However, if I was a betting man, and I am, then I would say that we trade in a wide range thru year end and attempt to establish some sort of basing pattern with an eventual retest of last weeks levels probable. Bottom line is that this remains a day traders market and we like it that way!