[Wag the dog]
<<I wonder if they're following our market (down today) or if we'll follow them.>>
Hi Pat,
Well, today was a very weird trading day. Through midday (EST) I watched my OEX puts nearly double, and then in the last 15 minutes (when I had to leave my perch in front of the computer screen), there was a screaming buying panic, knocking my puts to below their open price. I was quite surprised when I returned a few hours later. I felt for sure this was wrong fundamentally, but it looked like one of Ray's sledge Hammers, technically speaking. I was dreading the follow through on the upside tomorrow, but I'm not so concerned tonight. My read is that people have been trained to buy the dips, no matter how serious the situation, in the U.S. market. This denial may catch some people in a 'bear trap'. There will be a time to buy, but I think many see this as something akin to the Mexican crisis. This is much more serious, and the Dow is several thousand points higher than it was when the peso caused such havoc. To answer your question, the emerging tigers are in a downward spiral that will not respond to strength here. In fact much of the strength here is probably foreign money leaving there and arriving in New York.
Regards,
Richard
PS I haven't seen the movie, but the asian crisis does remind me of the tail wagging the dog, since I understand General Electric, alone, is worth more than all the SE Asia markets combined, save the Japanese.
PPS Indonesia rebounded to minus ~12%. |
