MARKET COMMENT
September 22, 2008, Courtesy of Dave Fry at ETF Digest
If you’re extremely nimble you can trade this market. Up and down 2-4% in major averages daily over the past half dozen trading sessions make for profitable and fun day-trading. If you’re not into that sort of thing, and most folks aren’t, then you have only two options: strong convictions and nerves of steel to hold positions or plenty of cash in safe places.
The message of stocks, gold, currencies, oil and commodity markets today was a Bronx Cheer to officialdom and politicians generally.
Volume shrank from the records of last week. I would say investors are stunned and don’t know what to make of things.
When markets are this volatile there’s nothing wrong with maintaining heavy cash balances until things settle. After all, none of you out there is running a large mutual fund where you’re paid to be “fully invested” at all times.
Big Brother continues to issue edicts and restrictions on shorting certain shares. If you’re a good blackjack player and winning in the casino, they may kick you out. So it is for folks shorting. Change the rules of the game to protect your pals seems the order of the day. That’s the reason we’re seeing the spike in gold, oil, currencies and commodities in general. Traders are flipping-off authorities.
The week is young and who knows what will happen next. The politicians will want to score points while the average investor and man on the street is flummoxed.
Have a pleasant evening.
Disclaimer: Among other issues the ETF Digest maintains long or short positions in: SDS, QID, SIJ, SMN, IEF, GLD, DGP, EFA, EFU, EEM, EEV and FXI.
