Tuesday, August 9, 2011
Watch for a Volatile Bottom
The overnight session is giving us a hint that the market is almost ready to bottom. 70 point overnight range is telling you that the market wants to bottom. The fundamentals are in place for a bottom with the ECB now going with QE and Bernanke likely to come in with his version soon. This is not 2008, but it is much worse than May - July 2010. And prices in the US anyway are higher so US stocks are going to vulnerable to further selloffs later this year. But before that, we should bounce hard. Looking for early weakness off this big gap up.
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US stocks are cheap, making new lows in gold and almost at the lows in Swiss Francs and even the recently hit Australian dollar. US dollar worth nothing but stocks are worth something... especially when inflation rate targeting QE starts as hinted by Rogoff
Very weak rally.
Also, it bothers me that a company like INTC is struggling to stay green, even though they just reported their best quarter ever, and gave an optimistic outlook. And they pay a dividend.
Still think the Fed needs political cover to announce QE-3. Budget concessions and tax increases.
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