First the breaking news. G20 and G7 fin. min. and c.b. leadership was in conference call fever this weekend. The result - ECB will buy Italian and Spanish bonds, and G7 will intervene in FX. Wow!! I am stunned at how fast they got things done. I hope they used Cisco's teleconferencing equipment, it is reporting Q2 earnings this week :)
It is very interesting that Armageddon II is not happening, at least for now. Japan, Korea, and Australia opened an hour ago and are down, but not to the extent that anyone expected - 1.2%. Of course it is early in the session and China, Hong Kong, Taiwan, and other Asian markets are not open yet. US stock index futures are down but once again not by enormous amount, - 1.7%.
I am not trying to diminish the importance of what is going on, but 24 hours TV coverage of the market turmoil this weekend was absolutely crazy. Folks, once the market's bad news make the front page of your local newspaper, it is usually the end and not the beginning of a sell-off. I am not a cheerleader, not trying to pump and dump, and not making any statements about the bottom. I am saying this is very close to capitulation, and tomorrow during US cash session may be it. So be ready, but do not catch the falling knife, wait for a bottom first. Speaking of which, I would like to say to those who were in trading business in 2008 - today feels like Bear Stearns tradable bottom. A lot of similarities... This said, I am not calling for 2008 Armageddon all over again, way too much cash around on corporate balance sheets.
And now on a cheery note. I have a funny question. What will we call S&P 500 once S&P goes out of business as a consequence of their US debt downgrade?
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