Could today be the day? Probably not I’m afraid…
You would have to expect a bounce after the horror of the last 4 days but the Dow tested 10,800 nicely yesterday (a day I happily stayed out of), even with GM in freefall.
The Nasdaq and S&P also held tough yesterday, perhaps embarrassed that they have been outperformed by Japan by 15% since November 1st (40% for the year to date).
http://finance.yahoo.com/q/bc?t=3m&s=%5EN225&l=on&z=m&q=l&c=%5Edji%2C%5Espx+%5Endx
That’s right, the Japanese stock market has increased 40% this year while our indices seem determined to be as flat as possible. An optimist would say that the US markets have held up fairly well considering all that world money has moved into Asia.
With the competition for dollars coming from exploding foreign markets, commodities, real estate and our own government’s voracious appetite for capital – it’s amazing the markets aren’t in freefall.
So amazing, in fact, I’m not going to be jumping into anything today…
I am very, very pessimistic at the moment and today’s action could just be a dead market bounce off some weak technical resistance. The NYC transit strike is still on and, this close to the holidays, you can’t make any assumptions about floor activities.
Yesterday was a great day to cash out so I am pleased with that call as all indices had a good start before collapsing in the afternoon. If surprisingly great housing starts couldn’t get the market going I really don’t know what will.
Although I am still wary today, I am happy that there are now some nice trading opportunities developing but I have to stress that every single trade should be looked at as a quick in and out with a 10% goal and I will be happy to make 5%.
I will be keeping very few positions open, still looking to have as much cash as possible. If the market is going to rally, there will be plentiful opportunities to get in, but, if the market is going to collapse, it will be very hard to get out.
Sorry, but that’s the way it looks…
