Let me say here that the bear mkt is far from over in terms of time period. At the very least we have 3 quaters of earnings rebuilding and a trough that has not even started to show any whatsover improvement, at the very least. That said and with the imenent recession as we have called since January that will continue to re-price valuations. The real possibility of a "war" time scenario has on the charts a NASDAQ that has not capitulated in any way like the DJ Industrials(which stil have another 1000 pts more to fall in the course of the next 6 monthes or so.... (Current regression has a trading bounce in the near future..ONLY a trading bounce for range of top of regression max).
With that all said, we have here have a possible technical situation of a speculative short term rally, initiiated by buy side firms after redemptions, with the interprataion that the warnings are yet again "as bad as it can get", which of course is ludicrious as we know here...but that will be the motivation for there short term ascertation of active bids. Again all this will happen after redemptions and fund tax losses, which we continue to witness.
Currently all fund managers are hitting any and all bids for redemptions. Warnings are about to start trickeling in, I do beleive that many companies wil not address there forward guidence at this time, other then remote upward projections until they are forced to revise lower when time is fit for them per the calander,there is no doubt in my mind no visibility is attainable, so the continued mid quater confrences will remain, and numbers can come down on any day.
This will all leave room for interpratation for the buy side firms in teh short term scenario. The short term rally is only a technical projction based on a few indicators that we have pinned, ie. RSI, ARMS, VIX, Stochastic, indexes wel below there MA's similar to last April for that single week when all hope was gone. Also to note is the daily rising P/C (10/21 is a Triple witch expiration). Like in April we have a rebuiliding trough on the 30 day regression.
What will be quite intriging is the arogance by these buyside firms..as they do not want to get caught in a situation where they are fueling the daily future premiums..and the US drops missles and bombs on there first targets. For this reason is why a speculation will most likley still be in a reduced percentage allocation if they get enough participation. Nas 1700-1890 would be max on a short term rally, with 970-0 max on the Dow..and I really have to hesitate that there is that many buyside firms that wil even risk there own capital for such a high risk situation..so those figures are so very highly speculative fro a "best case" scenario.
The Nasdaq will sell off hard..but before it does it will percalate off lower regression channells and find some bids after redemptions. Valuations on the $COMPX will be 1/2'd from current valuations... be prepared in the macro. In the micro a trading plan is in our current strategy.
-Mogul Fnd. |
