The most important reason why I'm still chicken little2 is that I think the market is still in denial. Most discussion is how far off the highs we are. And on technical analysis.
Very little is on whether stocks are now fairly priced for the uncertainty that lies ahead.
The generals in particular it seems to me are not. E.g., Dell, Csco, Intc, Lu etc. The generals certainly do not have a significant profit slowing, much less a recession, priced in.
Since no one really knows for sure what will happen, but there is plenty of risk, perhaps a probability of a sorta bad slowing profit result, and some risk of a recession or even a sustained and significant one, its hard to argue that stocks are not overvalued. At least the leaders.
And its is very hard for the secondaries to make sig. up moves until the generals at least stop going down. Seems to me.
Having said all that, some sort of rally seems likely to me tomorrow. Along the lines of...ok, this Clinton thing. So what's the worst. So he's forced to resign. So what.
Then people will start to figure he ain't gonna go easy. Or a least might not. Who knows?
Meanwhile, there's always Hong Kong or Brazil or somewhere else to devalue. Brazil is REALLY getting hammered today. Brazil's liquid bellweather, TBR, is down about 16% today.
Doug |
