July 7, 2008
Even with oil down substantially today, Mr. Market still couldn’t provide investors any kind of solid rebound after six weeks of consistent declines. Instead, Fannie Mae and Fannie Mac stunk up the financials while Starbucks and MRK demoralized pretty much everything else. Some analysts out there are already trying to make amateurish predictions that we have a bottom in place or being formed. Don’t get sucked into the hype. No one can make that call at this point. I’m on the bearish side believing that there is more to come and more pain to endure. If the market dares to give me a descent bounce of any kind, I’ll be shorting it till the cows come home.
Typically we would get a bounce before now, and the fact that we haven’t makes me wonder if this market is still going to keep tanking; obviously people have been trying to benefit off of a bounce for some time and yet the market keep falling further. When the market is this oversold for this long of a time, and still no relief of any kind, then that is a clear indication that the market has completely broken down. Heck I’ve tried once already to time the Dow at 11,700 and if there was an area that the bulls would have jumped in and defended it would have been there. Instead the bears crashed through that support level like a wet paper bag, and we took a dismal 3% loss.
Anyone trying to time the bottom is just rolling the dice. They may get it right, but the odds are against you in trying.
Here’s the NASDAQ and S&P Charts…