Tuesday, September 23, 2008

confidence in the market(s) is plummeting

the mood out there is about as negative as i've it all year. even the folks who have declared bottoms multiple times are now selling and buying gold. the question is whether things are getting so sour that we are getting some real capitulation.

a lot of folks make the mistake of thinking capitulation only takes place when there is panic and intense volatility. the insidious form of capitulation takes place with a whimper. it is when someone calls their broker and says, "I'm sick of this market and losing money. sell everything and wire me my funds." that is the real sort of capitulation that helps to produce major turning points.

we're probably not there yet, but if this action continues much longer, we are going to be there very quickly. there is no place to hide, and with the politicians yammering about disasters and trillions of dollars, confidence is eroding very fast.

if anyone has ever wondered, this is what a real bear market feels like.

No comments: