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About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Monday, August 15, 2011

Stock Market -- No Stabilization Yet

The SPX took out the rapid descent downtrend line as it continued to rally. But the market
shows no signs of stabilization yet, so it is fit to play only for the most seasoned, astute traders
who can watch the tape full time.

Up is better than down, but the curent recovery trajectory is nearly vertical and is far too steep
to be maintained. The boyz have run the shorts off the range and are feeding on the positive
momentum, but we know this will not last, and we also know that after even a mini - crash, there
can be bounces and wicked sell offs which follow quickly as the market in effect seeks to verify
a low or bottom. Check out the action of the SPX in mid 2010 here and for the modern grand daddy
of ongoing bull market crashes, have a look at the post Oct. 19, 1987 crash action here. Notice
the nearly vertical ups and downs before a rapid sell off established the bottom late in the year.

My plan is to let this market settle down and show some relative stability before jumping in long
or short. If that takes a month or two so be it.

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