gfp: I am absolutley of the opinion that we are going to follow the 1929-1933 template. The bursting of a highly leveraged debt bubble leading to a fast and steep drop in equities, followed by a retracement of about half of the losses. The market has to stabilize, the VIX will drop, complacency will return. Days like today, even though the markets were up strongly by the close, are still imparting fear becasue of the severe swings being generated. The futures were down 500 points before the morning session opened. Then the market gyrated all day before closing strong. So now we've strung a few positive days in a row now. People are going to have less fear. They will think we bounced off the bottom and this is another "but the dips" moment. And the market will inch up firther. Another 1,000 or more point on the DOW and another wave of investors will enter back into equities due to "FOMO" (fear of mssing out.) Then technical indicators will flash positive at some point and the chartists will join in. So I think this relief rally still has legs.
I was going to start shorting once we retraced half of the losses, or about 5600 points off the bottom. Well, with these lasst strong days this week we're only about 1300 DOW points from that level (@ 23,900). That happened quick. So I probably won't begin to buy long dated PUTS until we reach the 25,000 level, unless Bob Rinear says otherwise. I could write several chapters as to why we are a long way from the bottom. And I don't have time for it. Suffice it that I end with the old addage, that bull markets die of euphoria (we had that), and Bear markets end in despair. We're a long way away from despair. But we will get there. At DOW 5,000 or thereabouts.
AI
