I wrote earlier today how I was hopeful for a significant market rally in the short-term because there was too much bearishness.
I’m not so sure anymore.
This was a truly ugly day, the worst we’ve had since 9/11, and yet I see a lot of complacency. I know the number of bears in recent surveys has been very high, but I’ve been reading a bunch of stories on today’s action, and I see a lot of bottom-pickers or at least ‘What, me worry?’ guys out there – people who have been calling for the bottom for months and months now and feel this is an even better buying opportunity.
These people suck. We need them to go away, to admit they were wrong and didn’t realize how bad things had gotten, before we get a true bottom. We may just need to destroy those old lows of the summer before real panic sets in.
If we don’t get that panic, any rally we do get will be EXTREMELY short-term. The problems that we have created weren’t built in a day, a month, or even a year, and they won’t go away that easily either. Expect a sluggish, choppy market at best over the next couple of years.
BTW, can you believe the price of oil? $94?!? A couple of months ago, I made a call that oil was a bubble market nearing a top (I ended up posting the prediction on the very day the price of oil topped out, but that was just sheer luck). I said oil would hit double digits by the summer of ’09, and it turns out I was, oh, a wee bit early. I just hope politicians don’t take any credit for this – oil’s 35% fall is due to one reason and one reason only: A weak worldwide economy growing weaker by the day.
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