True to its character, the market went down today and in the process took the suckers down with it. The suckers who bought yesterday are under water now and may be already worrying if they will be able to get their capital back or not. Maybe AAPL's (foolish) run after hours on a pathetic guidance will save them. AAPL traded up to 104 in after hours. Does any one think that this run is for real?
I think the market can't remain in this indecisive state forever. It has to tip its hand sooner rather than later. As far as I can see, a big move is coming. The FOMC meeting is next week. This market is used to throwing tantrums to get what it wants. The fed fund futures are pricing in a 25 basis point cut. I am sure the market is looking for a 50 basis cut. So you know what it will do to achieve that?
I noticed that the VIX has deflated 20% from its closing high from last week where as S&P has gained just 1% from that corresponding level. I think that the VIX has worked off its overbought condition and may be ready to run again to coincide with a market drop. Or I may just be inventing reasons for a drop.
2 comments:
Do you think Feds are going for 50bps - isn't it the last tool at their disposal
I think they will use every tool they have at their disposal. They can go for 50bps and yet have room for another 100bps. There is no thing as last tool at their disposal. They will keep inventing tools as this crisis progresses.
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