Monday, September 22, 2008

State of the Market - 9/22/08

Quite a response to the big bank bailout proposed last Thursday from traders today on Wall Street, as stocks started lower at the opening and continued to head lower throughout the session. There were brief bounces around 12:00 and 2:00, but those were quickly met with more selling, and stocks finished near their lows with very large losses. Volume however was much lower than the climactic volume we saw last week.

The big story today was crude - a massive rise in oil and other commodities as traders seem to realize that the dollar will not hold up if the government keeps with its plan on monetizing all of this debt by creating more money out of thin air. I began investigating gold over the weekend, but after today I will probably wait for a pullback. It is still too volatile out there for any positions. Tomorrow is the first day we could have an IBD follow-through day, and perhaps if we get one, I would look at trying a few positions. I still see few great stocks, however, so I kind of doubt it.

There isn't much else to analyze right here from my perspective. The government is going to do anything it can to prop this market up, as they showed last week. Maybe it will work. Today certainly wasn't an impressive start to this new "bottom" that could be in place. If we continue to fall due to any delays in this bailout, then I can see the government outlawing ALL short selling like a few other exchanges have done recently. On the other hand, if the bailout is passed, then we could have another huge one or two day rally. I don't want to be short when the bailout is announced, and I don't want to be short if they ban short-selling completely (which I am expecting them to do soon.) All in all, that leads me to doing nothing but continuing to sit on my hands. Oh, the fun.

I may not be posting as much over the next few weeks until this market works itself out because I honestly get depressed when I think about this stuff too much. I'll write if anything major happens. I am beginning to realize that this might be a turning point for our country, and not a good one. Things may never be the same, and that is sad. So if you don't see as many posts up, just consider it a way for me to keep my sanity for the time being. Good luck if you are trading this mess. I stick by my opinion that this is a market to sit out of, and if you do that, perhaps things will settle and you'll be ready to go when things improve. Let's all hope they do.

1 comment:

Anonymous said...

I am depressed too, gov might follow Aussie to ban short selling on all stocks.