Wednesday, September 3, 2008

mkt today

hedge fund(s?) closing; forced selling?; oil to par by election? then what?

Afternoon Comments

We know we’ve been saying that this market has been difficult lately, but today’s trading session was a downright head-scratcher. Oil, which was weak early on, moved back towards the flat line, but that didn’t seem to help the energy and materials sectors out all that much. Meanwhile, the action in Nasdaq in general and tech in particular has been absolutely dismal of late, while financials, healthcare and consumer discretionary showed relative strength. Retailers and banks were two of the best acting industries today. Topping it all of is utilities which is looking rather precarious here, even though treasury yields are falling fast, and investors should be looking for the safety in their dividend yields.

Still, regardless of the fact that it was darn near impossible to make heads or tails of the action between then bells, the net result is that we continued to deal with a market that just simply isn’t seeing any leadership… at all.

The point to all of this is the same one we’ve been making for quite some time now. Despite all of the ferocious proclamations from the bottom callers that now is the time to be buying hand over fist, we are not dealing with a healthy market. Once we see clear demand, strong price surges and increasing volume, we’ll happily change our tune, but until then, we are going to stick with small trades, tight stops, and very short time-frames.

Have a great evening and we will see you tomorrow.

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