I Was On The Brink...

I'm working from home this week and have the TV on in the background and I sat here watching as the markets heard more and more bad news all morning and day long in addition to watching the 3 Stooges from Detroit and the markets held on and held on and I couldn't figure out why it wasn't plunging. I was at my wits end and then at the 3:00 hour like clockwork, the plunge came. Finally. But was it for real? Seemed rather weak actually. Sure the Dow fell over 300 points before bouncing back but I don't think today set a new trend down.

I made a nice 12% on a short position I took yesterday that I sold near the low of the day. But I didn't want to hold overnight. The unemployment numbers come out tomorrow and that's what actually caused todays plunge. Anticipating the bad numbers. So remember this, tomorrow when the numbers are released we're likely going to move up. The markets anticipated the bad news and already priced it in.

Short term direction is still going to be choppy. My guess is up tomorrow and then again on Monday and then we'll have another downtrend that may take us to new lows before the 2 or 3 month rally starts up.

Medium term I just keep wondering when this house of cards that keeps growing higher and higher and wobbles more and more will finally just collapse. It's amazing that even after a 50% hair cut in equities that we still aren't where the market "needs to be" or "should be"...

It truly is unimaginable the bubble that was created out there that needs to deflate.

Why is it that the powers that be feel that the solution to an overextended consumer is to try to bait them to buy more things they can't afford? 4 1/2% home loans? Sure, would be nice, but right now that's "only" 1% below where things are right now. And virtually everyone that can truly afford a house and pay for it already bought one in the past 5 years. Who is out there to take advantage of this? Sure, always some new buyers, but that number is small. And those who bought in the last 3 or 4 years with existing home loans can't refinance because their homes are worth less than when they bought them and they're underwater.

We're a long way off from being stable again.