JW, I think we are going through a natural chain of events here. It's as simple as this - the market got way too damned high back in February -- by any measure. It HAD to come down, and it had to come down without the disruption of creating the mother of all down days. All the current so-called news being reported about rate cuts (or not), earnings (or not), recession (or not), punched (or dimpled) is being used as an excuse to ratchet things down where they belong so that everyone can save face. Thus, the analysts can say "oh, our predictions for higher prices would have worked out if not for {insert phrase of your choice}
- higher oil prices,
- slowing economy,
- Fed slow to act,
- Uncertainty over the election.
I do think the houses have been working off inventory all year. Must be a very difficult thing to do with everything so overvalued before. They did it in such a way as to make sure the little guy always had hope that we were just having a little correction -- maybe that's why we didn't have a gigantic crash that would have gotten this whole thing over with quickly.
Of course, this is pure speculation. But, if it is correct, then the question becomes "what signs will there be that this is over?" I have this sneaking suspicion that the big downdraft everyone is calling for will not occur, and that will be the tell. At that point the houses will already have unloaded what they wanted to unload, and the only downward pressure will be from the retail investor. They (we?) then will watch in surprise as the market climbs from the abyss without having gone through its obligatory one-day crash.
INTCfan |
