The S & P has NOT bottomed. We have NOT flushed out the way we should on this news. We are like deers in headlights, very similar to 2008.
The FED has NOT saved or helped anything, in fact quite the opposite.
The fact that no one politically has stepped up and INSISTED that the FED be held accountable or step back and think about the real and I mean REAL ramifications of their policies is mind boggling. There are so many bright people OTHER then our FED that should have and should be brought in to offer help and instead we have a single minded solution that I don't see possibly helping anything but to try to keep things "in check" so that officials can keep their jobs.
We need a LONG TERM solution. There is no way out of this quagmire quickly. Let's be real with that and let's have an open dialog with the American people that just spills the beans on all. Then we can start on a LONG TERM solution (s) that are based on the needs of the NEXT generation, which will be the quickest fix for THIS generation (US).
Without that, we continue to go down a path of smoke and mirrors. Who has benefited from the stock markets rise other then traders (some) and the wealthy? Has it helped the midddle class at all? Has it created tons of jobs?
NO ONE, NO and NO - we don't need to be brain surgeons to figure that one out.
It seems to me, and I'd never say I know it "all" not even remotely, but it seems to me that when there are crisis situations you need to be open to any and all solutions, not just the one that one or a handful of people bring to the table. It also seems to me that the geopolitical issues that are surfacing around the world are PARTLY (some areas its slightly, and in some its more profound I think) due to the lack of real communication and honesty by the powers that ben. There simply can be no real solutions, other then the bandaids we have until the dialogue is open, until people are fed truths rather then half truths or out and out lies.
The stock market was going to, in my opinion, pull back dramatically no matter what. The crisis in Japan and other parts of the world just made it happen a bit quicker, but I gave a TOP TEN SHORTS class right before this all happened because I felt that way. I'm not patting myself on the back, I'll freely admit that I also said I thought we might get a bounce before that happened based on potential GOOD news. Trading isn't an exact science, all I try to do is make good observations based on historical trends and then make good decisions based on those observations.
What I'm observing is gross general apathy when it comes to reality and a lack of wanting to deal with reality.
When I'm going bad trading, which certainly has happened many times in my career. I have several choices, but usually it boils down to clearing my account out, cutting back on risk and starting fresh. It doesn't involve sitting in denial and continuing to do the same thing over and over again. When I've done that, and I have, then I just hurt myself even more. DENIAL is not a river in Egypt. Making the same mistakes over and over and expecting different results is by definition = INSANITY.
Right now the world is out of whack. Let's be real here and deal with it. Everyone who cares about humanity is and should be concerned with world events and world tragedies. I'm not offering solutions, I'm not in position to do that, but it seems to me that what's going on isn't working and unless I'm completely off then dealing with these things head on is the only way to truly get out of it LONG TERM.
In trading one of the first things we tell clients is "It's a MARATHON not a SPRINT!" That means that as long as I can stay in the game then the game isn't over. As long as I look at the bigger picture then my ups and downs in between are less important because my plan long term SHOULD work. Obviously there aren't any guarantees in trading or life, but at least I put myself in the best position to succeed if I do that.
I took the day off today, day after day of watching horrific images on the news has me a bit worn out and I need to clear my head. I am always confident I can rule the markets, but I can't rule the world. The world impacts me, as it impacts most of us. I'm grateful we're not going through what Japan is right now because it could be us. It could have been us now and it may be us in the future. We're all in this together.
The market WILL get a bounce here soon. It may come tomorrow or it may come next week. It'll happen for a tradeable bounce, but I do not believe we have remotely hit "bottom" and I think any bounce is a dead cat until proven otherwise.
Last night I was watching some pretty smart hedge fund guys talk about buying Japan markets because it was down "so much" and all I could think is - ok, its down a lot, the Nikkei is off about 20+% from last month. That's a HUGE move down. However, if you make that bet then you are betting that the situation won't worsen (let's hope not), but you're also betting on a rapid recovery. I hope that happens but HOPE is a 4 letter word and I just don't see other then trading it (I made money trading the Nikkei LONG yesterday and today and as I write this I'm long it but will probably be out of it by the time you read it!) making a stand until we see what pans out.
The US market on THIS NEWS alone in my opinion should be down a LOT more then it is. It doesn't matter if the Nuclear stuff clears up or not. My best GUESS is it DOES clear up, but my best second guess is we then get a nice tradeable bounce only for reality to set in and the market to then fall again. Look at the markets around the world, the volatility is off the charts everywhere but here, that to me smells like denial.
OK, so there ya go, I think 1250 could hold for now like it did today and the futures are bouncing and so is the Nikkei at the moment as I wrap this up but who knows, I certainly don't, how long that'll last.
I decided yesterday to take today off but when I saw the market gapping up it was like I was salivating. I won't say "unfortunately" though I may feel that on some level, but I stuck to my plan and just ignored what seemed like a total gimme in terms of a gap fade short.
Why? Because LONG TERM I am thinking about the overall plan and if I need to take a day or two off, then that's what I need to do. Besides, I came home and relaxed and felt good and saw the Nikkei gapping down huge and that idea was enough for me to make a small trade and I made nice cashola. See what happens when you clear things out? YOu open the doorway to better things to come.
That's what I believe we need to do with our monetary policies. It's NOT too late, but the longer we waste time on policies that show no empirical evidence of working, the longer it will take to get out of the quagmire.
And getting out of the quagmire has zero to do with whether or not the S & P holds 1250 tomorrow or the next day or week, it has to do with having a LONG TERM/MARATHON solution that will allow us to move forward and feel confident that the plan will pan out positively.
Bottom line, let's not live in denial folks. Even when the Nuclear issue is off the table in Japan that isn't the "all clear" signal for anything other then a tradeable rally. If you look at it as more then that in my opinion you are in denial.
The market will be there today/tomorrow, etc. Let's be LONG TERM peeps and not short term profit oriented in terms of making risky trades and taking unnessary risks for no reason other then being greedy.
G-d bless all and more later. Hope this doesn't offend anyone, I'm just passionate about our country and the world at large and you, my clients and far too often when we get a market souring I've seen clients sit there, deers in headlights, until their accounts are wiped out.
Please don't do that. No panic, but make a PLAN and stick to it...that's what I'm intending to do myself.
RULE and rock on -
Michael "Waxie" Parness