>>Could this be the sea change we feel ?
>We are experiencing a fundamental change, on that we agree, Marc.
Steve,
Thanks for your great post. I'm sorry I've been swamped with preparation for the semester and didn't give you much argument. What a rude awakening when I saw Thursday's market report! Your theory that "the financial sector's exposure to currencies outside of the Pacific Rim, in Russia and Latin America, and even Canada - appear to be a cause for this effect." certainly seems to have bourne fruit. You didn't have to trash the market to prove your point, though!
Now we really will see whether the weaker hands are the major funds (who seem to be bailing out) or the small investor (who seems to be hanging on.) I don't know if you've reread the posts of this past week, but we went from generally looking for an upward breakout to wondering whether we should cash out now and buy back in at a lower level. Jury, you seem to think that even an upturn on Monday will be a "milchfrau" rally. Could you or DJ explain the term? Incidentally, if it drops to 7000, all support rules typical of an ordinary market will have been shattered, and who knows what would happen. I will be shocked if we go below 7400 and will submit that there's some other doomsday theory at work, if we do.
For the record, I still don't think that the Russian exposure is substantive in terms of American banks, but perception is (nearly) everything. Thus I think that CCI (for example)is oversold at current levels, but that recovery may take anywhere from two months to two quarters. But companies like CAT are exposed because a byproduct of Russian and Pacific Rim instability is a decrease in construction projects, or the rate of expansion of construction projects, which is why you buy new 'dozers.
Regards,
Marc
PS If I'm irregular in posting, I apologize, but the next two weeks are crazy in terms of the new semester.
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