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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (202734)	5/17/2009 8:12:54 AM
From: RockyBalboa	Respond to of 306849

I have turned bearish about a week ago, and particularly tech stocks have confirmed that fundamentals do count (see csco). The latest correction may look somewhat shy but it is not inviting traders to buy a large sudden dip, something which could set up a bullish breakout. As you said that could happen sooner or later, but not in a market which slowly normalises from overbought conditions. And hell, particularly banks became overbought (BAC already corrected a lot from its 15ish high; for insurers, the same might apply once the effect from upgrades wane). Then one has to watch monetary policy. The run-up was supported by running printing presses and accompanied by a weakening of the dollar which again rises the specter of poor international demand. Europe may be fragile enough not to prosper with EUR levels above 1.30 and the strong yen seems to hurt Japan more than help. All that happened at super-low interest rate levels with maturities further out (see Libor) climbing towards 1%. This is a fragile environment and any corrective action which drains money could also end the stock boom quickly. Again one has to ask; what has changed compared to a year ago to not justify weakening markets? Job growth? Consumer demand? Housing? Manufacturing? Well, perhaps "financial services".