MARKET COMMENT
November 12, 2008, courtesy of Dave Fry, at ETF Digest.
Big Wednesday again? Heck yeah! I may as well go with this video today for the image. Only the best can ride waves like this guy and it segways fittingly to todays market environment. And, no, even in my youth I couldn’t do it despite many years in Hawaii. So I’m just sitting on the beach waiting for waves my size.
One observation I’d make is I’ve never seen weekly and monthly RSIs [Relative Strength Index] with readings this consistently low. This is how extremely oversold conditions are. We are witnessing history in my opinion.
Conventional wisdom, better known as hope, argues that markets are just retesting their lows. One more day like this and we’ll be there. A failure to hold those and we could experience a sharp waterfall leg lower. That’s scary.
Volume is still relatively modest but breadth is horrible. The new lows just keep building.
I’m not going to post all the sector charts today. We’re looking at the same thing from chart to chart.
StockCharts is having more issues today since many ETFs have moved from the NYSE/AMEX to ARCA. They don’t have today’s data and won’t until tomorrow. Therefore I obviously can’t highlight those. But, as I’ve indicated the picture is the same from market to market and sector to sector.
It’s said hedge funds saw $100 billion in redemptions last month. That goes with probably the same amount for mutual funds as investors scamper to the sidelines to protect whatever they have left. Private money managers and investment advisors are feeling the heat as well with clients demanding answers that are difficult to provide.
I’m sad for the many investors who are literally in shock at what has become of their savings and equity in property. Investment advisors are also in shock as their business models and clients have been victimized by the Black Swan.
I’m as greedy as the next person and want to be a participant now. But, risk management for a diverse set of subscribers, who for the most part aren’t gun slingers, is as important as performance. So while we’ve made a little money in 2008 we’re on the beach just waiting our turn for conditions that better suit our skills. It will come no matter the direction.
Have a pleasant evening.
Disclaimer: The ETF Digest has no positions in any highlighted securities.
