I suppose I now know what the bulls have felt like for the past 6+ months. I don't know about them, but for me today made me question what I believe. I suppose a bit of healthy skepticism is a good thing, but it sure doesn't feel so good.
I hear that a lot of what happened on the floor today was short-covering, thanks to Barney Frank saying that he wants to reinstate the uptick rule as well as the threat to make short sellers show their hands. I totally agree with both of those moves, by the way.
If we are indeed in the Super Bear Market that I believe we're in, this isn't going to be long-lived. Reality will rear its ugly head, the economy will still suck, and we'll put in the lows down where I think they belong.
I don't know if anyone caught this, but Jeremy Grantham who had been known as a perma-bear is telling everyone that will listen that it's time to get into the market before you miss the big rally, while Benjamin Graham's methodology says the market is still overvalued by about 27% (that was yesterday... so I suppose it's closer to 33% now).
I'm going with the dead cat bounce theory for now, but I'm watching it all pretty closely.
Be careful out there.
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2 comments:
Patty, I agree with you and Jeremy Grantham. I believe the lows will be hit sometime in March or April which will lead to a nice rally probably to the 900 - 1000 level in the S&P 500. However, the market will then turn as there is still a lot of bad news to yet filter out. When you look @ the Dow from 1929 to 1932... we saw 3 distinct declines of 50% intersprersed with rallies. My guess is we get to 380 - 400 on the SPX when all is said and done.
The market never goes down without a few bounces. And you're right, we could have a nice rally here... or it could just be a one day spike and then fail again.
Your eventual target on the S&P is quite similiar to mine.
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