Intermediate-term trading:
The other scenario we need to consider, is that we have a bear rally like the one that began in May 2000. We didn't take out those lows (I'm looking at the SOX chart), until October 2000. In retrospect, that was a big, long bear rally, but it sure felt like the bull was back, at the time. For anyone who shorted into that rally, it took a lot of patience and courage to hold until new lows.
I see consumer confidence, and consumer spending, still falling. This is the plankton at the bottom of the economic food chain, whose decrease will eventually starve the top predators, like AMAT. Those GDP numbers surprised me, though.
At the beginning of April (when everyone was discussing whether we get a recession or a depression), I was 100% long the market. As of today (when everyone seems sure the bear market is over, and we won't get a recession), I'm 70% long (old economy Value), 20% put LEAPs (overvalued techs), and 5% cash. |
