West, don't be too "negatively exuberant", we have already taken a very big chunk of the decline here getting pretty close to that 1850 number. However, the market does not go down in a straight line, and right now, the bears are getting a little to sure of themselves, the equity P/C ratio is quite close to 1, by 11:30 this morning, it actually got just a tad above 1.00, meaning a reflex rally maybe coming. Because we did not get extreme readings in the tick, so far and because th volatility indices are still quite neutral and climbing (they have not reversed direction), I do not expect such a mini bounce to be too powerful (I still have 1973 as the target), but if we open lower on Monday (which right now, I doubt), then we will not get that post FOMC decline I was expecting, and the resumption of the decline may not start until a little later. If you are heavily short, I suggest you use any Monday morning weakness, if we have it to cover some of these.
Good luck out there.
Zeev |
