Watching CNBC this morning, it was as if everyone was expecting whatever sell off to amount to an incredible entry point into stocks. Yes, a capitulation and reversal was the expected outcome of the Banking Panic of 2008.
I was looking for that, too.
Yet, after the initial tankiness, we rallied some but are now again selling off. The big clue will be the end of day action. Will it be bought, sold or move sideways into the clothes?
While the financial news is grabbing the headlines, most everyone I know went off to work today and seems to be riding out the turmoil in stride. This still seems mostly a result of the mortgage bubble, and for most of us we just work and continue to make monthly payments on our homes. We lost a few hundred grand in home equity the last few years, but we weren't among those who cashed out and spent money on cruises, cars, or remodels.
Behind the scenes, we're all getting a "tax cut" as fuel prices continue to fall.
Ain't that nice?
The Long-Short model is still long the PSQ (inverse NDX) and doing quite well today. Yes, it is at extremes. And with that in mind I was going to sell some today and raise cash positions, but will wait on that to see if we do get a real panic soon. And if we do free fall into the clothes, I will sell partial to book gains. (Still just paper trading the long-short model, FWIW).