I can’t tell you the amount of e-mails I received yesterday citing oversold conditions. Many folks asked me to suggest names to start buying. I’ve said for a long time now that oversold markets can stay oversold for much longer than we think. The same holds true for overbought markets. There are reasons for this dynamic and it’s pretty simple. Either things are really horrible out there or very good out there. Right now things are pretty horrible. No one wants to play in traffic right now, and who can blame them? No one wants to be Christopher Columbus and be the first one to see if the world is flat.
Dow futures are down a 100 points and oil is higher by about $1.50. We will get some bounces along the way, but I think 10,000, maybe 9500 is in the cards. We need a flush, a big one, to finally shake out weak hands and get this animal a fresh dance card. Until then it will continue to be a slow bloodletting.
I will continue to play the same names as usual until they stop working. A huge “tell” for me yesterday was the absolute disregard for the Fed intervention, it tells me their are few believers and the towel is being thrown in. I will try best to twitter some thoughts as I go today. Be careful and use stops. Don’t let a trade become a prayer.
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