Tuesday, June 13, 2006

Concussion Morning

Feels like a big concussion grenade went off overnight as this morning has a lethargic, jittery, hung-over feeling.

Overseas markets opened way down with Gold and Oil contributing to the carnage. Since the open the markets have been trying to rally, but the action is this sort of unsure, shaky, "I know I should buy but I am too hurt and bone weary to do it".

All this with no real bad news out. Granted, we have all this inflation talk, the Fed, this and that, but in reality, what's actually new out there? We knew about inflation for some time now and we knew about Housing for just as long (BTW, whatever they say, but in NYC area where I live the prices aren't budging. Whle am a bear on real estate I don't see ANY technical (price) confirmation to the whole "bubble" hoopla.)

So, either the bad news is there and it's simply not in print, or what we see is what we get and there isn't anything else coming. If so, I doubt this is going to get a lot worse. Judging by the looks of the emerging markets (I am specifically referring to India, Russia, Turkey, Japan and Brazil) it already has for them. And if we can view these markets as exaggeration of the U.S. indices (after all, they are much less mature and liquid - thus the 40% moves) then the U.S. will bottom out along with them.

The synchronicity is there - the world "collapsed" on 5/11. Could it be that it "finds the bottom" on 6/13? Possibly. After all, we have the world discounted by roughly 30% in just one month. Yes, it's a crash, yes, it's brutal and yes, it is constructive.

I'll probably speak for most of us when I say that we're "too hurt and bone weary" to trade this potential bottom. But recognize that you'd sure hate to miss it. And as you know, when the going gets tough...

Best of luck, folks.

Cheers,
/Dmitry

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