Today’s rally looks pretty good on the surface.  Anytime you’re up around 3%, that’s a really good day.  But, the volume is extremely low today and looks to be the lowest since perhaps late August.  Also, we’re still seeing a lot of stocks down today.  And, up volume is about 82% of the total volume.  So, it appears to be a rally that isn’t real convincing.  Once again, I sit and watch.  Prove yourself to me market.  One day doesn’t make a rally.   

We have an economy that is still weak and continuing to weaken.  We have earnings estimates that will keep coming down.  We have no demand for stocks.  And, we have a candidate who looks likely to get elected and raise taxes.  It’s not a great combination.  On the bright side, we have a very oversold market, fear is very high, credit spreads are tightening up a little, and we could rally a lot from here based on some technicals. 

But, as I’ve stated, I’d rather let the market prove itself to me for a few days, and then buy higher octane positions once the real rally starts.  But, today didn’t look like the real thing.


4 Responses to “Ho-Hum”

  1. 1 Jrb October 20, 2008 at 3:20 pm

    It seems everyone is looking & predicting a rally and pull-back and test of the lows. Everywhere you turn (tv/radio) people are saying it. With that being said, does that in any way change the psychology of it. Or does it just mean as it goes up people will just forget and buy blindly into it or the other side is it won’t rally as much b/c everyone will be taking profits and selling into the rally.. Any thoughts “O Wise One”??? (i DO NOT mean that sarcastically)

  2. 2 Lee October 20, 2008 at 4:07 pm


    Don’t 300+ up days occur only in bear markets?

  3. 3 keggerss October 20, 2008 at 7:10 pm

    Yes. Since 1995, all the 300+ point up days on the Dow have occured during bear markets like 2000-2003 and October 2007 until present.

  4. 4 keggerss October 21, 2008 at 8:13 am

    JRB. I agree that the opposite could happen. Instead of speculating what people might do (which is what we do when we talk about it), I’ll be watching what they ARE doing. Right now, they still aren’t enthusiastic about buying stocks. I’m just comparing past sell offs when I come up with that thesis. But, in general, I agree with you that the opposite could happen since everyone seems to think the same.

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