Showing posts with label IMF bail out. Show all posts
Showing posts with label IMF bail out. Show all posts

Bulls are Back!

IMF bailout crashGreen Monday continues this week as the Dow is currently enjoying a 360 point rally to respond to last weeks disaster. As I said Friday, this is something I was definitely expecting, which is why I chose to exit out of most of my short positions before close. Whatever the reason may be, Mondays have a very significant trend to result in positive trading and considering how we finished last week, I knew there was potential to see a lot of green today...and that is exactly the case. One detail to note though is that the volume of today's trading is much more mild than on the days of selling. Once again, we are seeing evidence of an actual lesser amount of buyers, but just more trading per buyer than seller. This could lead to several conclusions, which mine is, don't short Mondays.

Much of today's success is a result to the trillion dollar bailout the IMF and European Union passed over the weekend. This is exactly what I was referring to in my post this weekend. Time and time again, government regulators are coming to rescue with event after event. Sure, on paper it looks to solve all major problems. Just throw some money at it right? I don't think there is any economist out there can accurately forecast the kind of global side effects the global economy will face in the coming years due to trillions upon trillions of essentially "buried money."

Sure, the rally has brought a bit more confidence back for investors, but still many buyers remain sceptical. Even today's much lower volume compared to the selling days show that many are much willing to sell than to buy at this point. So sustaining this rally should be a difficult task this week and one which will be met with a lot of opposition on daily basis. Already, there are many who are opposing the IMF's decision, saying that after one climbed mountain, there's 10 more behind it. So what happens when Portugal, Spain and Italy's debt becomes threatened. Are they too eligible, or will they be given the Merrill Lynch treatment. At any rate, I did expect today's rally, so today acts as no surprise, however I do feel that it will be very hard to sustain. Thus, I'm seeing some more shorting opportunities this week. I will give an updated post later on after close.

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