ES under 1150 is a buy area, ES around 1200 is the sell area. Let's not get emotional about the market, the market is pricing in a recession and those in denial about the recession are Pollyannas. This is no soft patch, this is a full blown recession coming. It can be argued that we never got out of the recession with the cooked CPI numbers overstating GDP growth.
Even though I think the economy is in a recession, from a stock market perspective, there is a high probability that this is just a dip in the bounce off crash scenario that I see playing out. Bounces off crashes usually last 6-8 weeks before retesting or cracking through previous support. That 6 week window allows for one to play for rallies in a bearish market. That range should be around 1120 to 1220, so we are in the lower end of the range.
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7 comments:
Good points.
My view.
The economy is going to get much worse. BAC cutting another 10,000 jobs. Your still hearing all the NEW jobs lost. I think in the 3-4th quarters, company's see the recession coming and will make the necessary adjustments.
The recent lowering of GDP estimates are only the beginning.
I realize the market dosent = economy. But we're probably overvalued. And I think the trading range you have on the s&p is to generous. More like 1100-1190...with overshoots excluded.
Again, of course all this is off the table if Ben incorporates Qe3 or European banks collapse..
Pick a range 1100-1200 or 1080-1180, too much desperation, me included, that this market can have a solid bounce.... we need need to kill the hope, I agree with Owl we won't make fresh lows for 6-8 weeks... but we are still potentially in the process of the first low... that said Germany's DAX was a new low today and good reversal and it is the worst hit market month to date so maybe we are OK playing long with these lows.
We should make a new low soon but it won't be the low for this correction. Correction low not coming until last part of September-should be around 9000 dow.
this recession will be mild and last less than a year when economists point to last may as the beginning because there are no bubbles positively correlated to equities. one could argue there is a gold and bond bubble but that popping only supports stocks later on. i believe there will be a gold bubble, it may even surpass housing bubble. and when that crashes, it means big bull balls up in equities.
Every rally still meeting with significant selling. Friday should be interesting.
Look at Asia, much the same as US but today it squeezed and didn't fade... possible US does the same. Re-short Friday.
I am constructive on the market, it looks like a lot of volatility the past 3 days but we aren't going much lower. Tells me we are making a short term bottom.
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