Techcharter: VXO
Clearly this is not a market anyone is anxious to buy. The low VXO reflects the equal and opposite fact that no one is anxious to sell. Gridlock.
So the problem of liquidity will only occur if stockholders find a compelling reason to want to sell. And that is why we wait. Compelling reasons are certainly upcoming but they are not here now--at this moment. Could change in the next moment.
So you are correct that the current environment is somewhat brittle. It also has a certain strength. Prices have the appearance of stability. That stability will remain so long as some compelling catalyst or cycle down does not motivate impulsive selling.
If the price of oil pushes above $50 and stays there, if the price at the pump heads for $3, if earnings warnings accelerate, if the jobless claims charts turns upward, we may see a rise in motivated selling.
The convergence of fundamentals and cycles points to late December. A moderate selloff could be in the works for October. Meanwhile, enjoy the paint.
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