I do a bit of financial writing... my thoughts from today:
A possible bottom in the market
Today marked the perfect intersection between the trend line formed between 1990 and 1994 and the market close today. Why is this important?
All we have heard about for the past decade or so was bubble this and bubble that. Bubbles refer to artificially inflated stuff- be it tulips in the Dutch Golden Age (1630s), dot com/techs, or housing/credit/financials this most recent, I dub the living beyond our means bubble. The last time we had a sustained, fairly valuated, consistent and normal equity growth ended in 1994. So, extended to today, we are back to our more natural trend line after 14 years of remarkable volatility.
I'm not saying by any means that this will be the absolute bottom, but Washington is beholden to do the right thing next week. If Geithner ponys up and comes up with a sane and logical approach to attack the banking crisis with a focus on segmenting toxic assets, stays away from nationalization, and if further clarity is offered for the mortgage rescue plan, it could mark a point where we see some support here and lays a decent foundation for a move higher. If the DC area fails us, lower we fall. In short, I see at least a bear market rally starting here in the few days, but watch your positions closely and be prepared to exit quickly on a break lower.
A possible bottom in the market
Today marked the perfect intersection between the trend line formed between 1990 and 1994 and the market close today. Why is this important?
All we have heard about for the past decade or so was bubble this and bubble that. Bubbles refer to artificially inflated stuff- be it tulips in the Dutch Golden Age (1630s), dot com/techs, or housing/credit/financials this most recent, I dub the living beyond our means bubble. The last time we had a sustained, fairly valuated, consistent and normal equity growth ended in 1994. So, extended to today, we are back to our more natural trend line after 14 years of remarkable volatility.
I'm not saying by any means that this will be the absolute bottom, but Washington is beholden to do the right thing next week. If Geithner ponys up and comes up with a sane and logical approach to attack the banking crisis with a focus on segmenting toxic assets, stays away from nationalization, and if further clarity is offered for the mortgage rescue plan, it could mark a point where we see some support here and lays a decent foundation for a move higher. If the DC area fails us, lower we fall. In short, I see at least a bear market rally starting here in the few days, but watch your positions closely and be prepared to exit quickly on a break lower.