Hopes for a bottom are fading fast as the indices enter dangerous territory. The last few sessions produced a series of lower highs and lower lows. A retest of former support levels looks likely.
The macroeconomic picture is deteriorating, not improving. Mish has two great articles detailing what's happening globally:
Economic Crisis Around The Globe Continues
Currency Crisis Meltdown in Europe, Japan, Australia
The news is always its worst at the bottom. The problem is, the worst keeps coming. Deleveraging continues with the Yen and Dollar carry trades unwinding causing them to soar while popular cross currencies and commodities continue to plummet.
Cash is a position that looks better every day.
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So Rally over then?
ReplyDeleteI think it's best to let this market prove itself first before determining if a legitimate weeekly-monthly rally might ensue. We are clearly consolidating and tenatively holding at support but as we've seen that could all erode quickly. Most indicators point to oversold conditions so the bias points upward.
ReplyDeleteBrave souls buying here will do well to keep positions small and stops tight.