The day of Reckoning is finally upon us. Repent or thy will will suffer the wrath of the Market.
I hope everyone and their mother either crash proofed their investments or bought massive amounts of put options. I did both to balance out my portfolios risk-reward level to something I was comfortable with.
During the past week, we’ve seen profit taking from commodities to help out the beleaguered market. Basically, when the market got too close to 12,000 commodities were sold and the market was pumped up by 200 to keep the market afloat until Friday. Why? To make it seem like the unemployment number caused the huge drop. I’ve seen this behavior before and have written about it.
Let’s be clear: this profit taking has nothing to do with the commodities market fundamentals. I’m expecting some obscure commodities to go up substantially more than gold. Some commodities are still priced as sweet prices, if you get the drift.
Why is the Market Going Down Tomorrow?
I call it the “Dow 12,000″ theory. If you look at the last time the Dow hit 12,000 in January, there was a sharp bounce back immediately for no particular reason. Investors just “guessed”hat 11,999 was ridiculously cheap for some retarded reason and bid up the market 4.9% in the following week. Now we are at 12,000 once again and speculators have had a month of losses drill the fact that 12,000 is not cheap in their heads. I call it boot camp for the hard of mind.
This whole situation reminds me of the Titanic. Those that thought this economy unsinkable laughed at those who warned of the Armageddon unfolding before everyone’s eyes. Unfortunately, for some to win some must lose. For years, the cult of the bull raged on while sacrificing the bears to the gods of indignity. Now, reason will finally triumph.
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