{+++} On last nights video I talked about the possibility of a very strong open, but I also warned that the rally may be short lived as the economic back drop is still horrible. Frankly I never expected such a violent give back of gains but I am not at all surprised. Along came the ISM number that was so bad it was even worse than the “whisper” number. Europe also had a bad showing today, the Euro was weak and the European ETF’s like EWG, EWI and EWP got hit hard. If you think we have problems just look across the pond, those folks are only in the third inning. No offense to my European subscribers, it just is what it is. We all have huge challenges ahead of us.
I think it’s fair to say the market is jittery and is in the mode of “shoot first ask questions later”. If you are a new subscriber (or a salty veteran) today was a perfect example of why we try and wait 30 minutes (maybe a bit longer) for the market to be open before we place our bets. This can be especially true on Monday’s in general, but specifically on a morning that opens with a major news event. Don’t rush, take your time. It’s silly money at that time of the day and the market resembles a bunch of drunks playing in traffic. You will always get a bad execution and you will probably end up regretting your lack of patience. Today was nuts.
There will be no shortage of names to play long or short going forward, but there aren’t any new additions tonight. I don’t want to play in traffic and want this market to settle a bit. That could be tomorrow, maybe the next day. As Elvis said, “only fools rush in”.
This Washington drama has peaked in my opinion and we wait now for the Senate vote tomorrow which should pass without any difficulty. Keep in mind we still have Europe out there, and you heard it here first, the double dip recession rhetoric will heat up soon. That will be a bigger problem than any of this should it decide to grow roots.
Have a good night and I will see you tomorrow.