Remember, all the trillions didn't disappear, it went to cash and other safe havens.
Uh, actually, in many cases, billions has in fact gone up in smoke. Not all of it was transfered into someone elses pocket.
Being a perenial short seller, I'd love to think it all ended up in mine, but thats not the case. A massive revaluation of stocks means that many folks lost value they may never see again. The axiom you don't lose until you sell is dead wrong.
Being a realist, I look for bounces and buy them too, I like to make my money on the way up and down. Today was unreal. I bought many bounces that appeared to look feasible and would hold; the story is out, none of them did. I'm pretty good at picking intraday bottoms but each and every one today saw unrelentless selling.
Could it turn around in a day? I doubt it. 2.3B shares down volume against 0.1B up volume (on the Nasdaq) says I doubt it.
what has changed? A little inflation. No big deal.
Personally I think sentiment and emotion has changed, and its not just today that suggests it to me either. Its time for the "What Were We Thinking" recrimination series of TV shows as folks recognize that paying 1500x earnings for 5 year "potential" growth, some of these stories starting to look dubious, is nutz.
The resulting fall out is sure to make Bre*X look like a dime store robbery.
Asset inflation is the issue; irrational pricing is the issue.
That real inflation has troughed some time ago and is starting to pick up a real head of steam is just the straw that broke the camel's back IMO.
So in conclusion, if you are a nimble trader, sure, there may be some bottoming and rallying, perhaps even soon, but I suspect that rallies will be sold for some time until the most resolute bull is crushed.
Could be weeks, could be months. |
