Short Term Memory

investors memoryInvestors are all buy today as some good economic data as well as a strong earnings report from Intel sparked a lot of green. Bulls are feeling the strong push today supports their notion of the next leg of the rally happening. I am not so easily convinced. Although today is breaking through some recent Fibonacci resistant points, a lot of today's buying is also emotional. Many feared inflation possibilities (even though I've said several times that inflation is still a ways out), but today's CPI data came in line with analyst's expectations, which gave another reason for investors to cheer. Industrial production still remains down, but less severe than recent months have shown. Overall, if you're a bear, which I am mostly in my portfolio at this point, you are hibernating today.

It is amazing to think about how quickly we, as a society, are able to forget things. Just months ago, investors were avoiding the stock market as they would the plague, as fears of massive bank failure, huge corporate bankruptcies, and a diminishing dollar crushed investor's confidence. However, almost as quickly as the flick of a wand, those worries have diminished and been replaced with a fire of confidence. In many cases, scary signs still remain. A still falling residential market, massive unemployment, and a beginning to a commercial real estate crash are just a few reasons I cannot stand and cheer at this point. I want nothing more than to see us pull out of this, but I am waiting until I see a full recovery, not just fabricated numbers.

Just how quickly this reverse in sentiment has come it can leave. Today's rally is refreshing for bulls, but still hasn't turned any tides at this point. Heading into close, I will be considering picking up some FAZ and SRS, as I am not so confident at this point we will be seeing and big buying strides. I will have a rather informative podcast tonight for you subscribers about some serious data that doesn't make headlines.


  1. Anonymous Says:

    Chris, I agree with you on your points.. However the Bulls are in control and are successfully climbing the wall of worry..If they take out 950, there will be massive short covering and buying as most bears will have had no choice in converting.. It is very confusing to me what to do.. But I can't fight the trends which as of right now are still sideways.. However 1000-1050 S&P I will get aggressive on the short side regardless of my emotions to stay long.. It is truly amazing how quickly things have changed with investor sentiment.. One question to you.. Does the market always retest it's lows such as march or is it possible this time it aint looking back?


  2. Finance Fanatic Says:

    I agree that technicals are causing a lot of grief right now. It is very common for there to be a retest and in our current situation, it would make a lot of sense for many reasons. Does it always? Not necessarily, however, barring some unseen crazy event, I expect a definite retest...Such transition periods are very common in bear markets, Frustrating as hell though.

  3. LicensedToKill Says:

    decided to gamble on srs and picked up some srs calls before the close.

  4. Finance Fanatic Says:

    I took the gamble as well. Not too many shares, but enough to enjoy if we see a minor bounce back.

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