Simon's The Sky is Falling Thread - Page 22

Sure it does, it's called near zero rates. Being able to borrow cheap money is providing immense liquidity. Fundamentals like how the economy is doing is a driving force in the long term picture, but right now it's all about an abundance of cheap (to borrow) money. That's everything right now, forget the economy.

I see a few problems with this.......

We'll find out.

I've been guessing that we'll still see another market rally once we find support here, and even though it's looking pretty scary out there right now, I still think that's what will play out. Today seems like a perfect capitulation day to reverse off of, I'm guessing we close strong above the 200 MA and today marks the bottom of this dip. My feeling has been that we'll see the market rally again, sentiment turns back to bullish, and at minimum we'll test the 50 MA, if not the April high or even break that. It doesn't feel right with everyone bearish at the point, I think this dip will turn around and then everyone will kick themselves for not buying it, everyone gets complacent again, then we really head down. This recent low is the critical area to watch, especially if we bounce here. A break below that will really get the bears going and freak people out.

I really want to see the markets go back into rally mode for at least a couple months, but we all know how often the market does what you expect/want it to.

With the VIX popping above the upper bollinger band, we're looking at a possible VIX sell/ market buy signal, though it hasn't played out yet. Something to watch for, but in that case you probably wouldn't want to go long the VIX/ short the market.

OK, today really looks like it's going to mark the bottom in the market for a while. I'm crossing my fingers that the bull rally returns and volatility gets crushed again, I need to rebuy some put protection and I want to buy at a discount. Major sell signal on the VIX today, which means time to get bullish on the market again. This may or may not end up being accurate, my source is a reading from Miss Cleo, and every once in a blue moon she gives me bunk info.