July 16, 2008
From the very start, with Wells Fargo posting a solid earnings report, and oil slumping – the two areas that have driven the markets to two-year lows, made it near certainty we would get a huge day from the markets. However, despite today’s solid gains, we still to tread carefully. Mr. Market could easily give back all of today’s gains should the bears decide to immediately pounce on the gains made today. However, while that’s a possibility, that is not a tactic we wish employ.
Instead, we will wait for this market to run a little further, before we attempt to short anything. While today will be argued by the so-called market experts that we may or may not have reached a bottom in this market, we are more than willing to state that we have no clue – and frankly we don’t care. We will continue to follow the road that the markets put before us. One thing is certain however, the bears will jump on this market again and try to drive it lower. When it does, it will be imperative for the bulls to not give back all of its gains. If it does then nothing has really changed about the overall climate that has pervaded this market for some time now.
A word to the beginning investor and trader…
One of the reasons why we became nervous about holding our short positions earlier this week, was because first, the market was reaching ridiculously low levels of being oversold. The other important factor was that, there was two many government entities (i.e. Congress, White House, Fed, etc.) trying to actively manage the day-to-day markets. While their efforts may prove futile down the road, we knew it couldn’t be long before the market bounced hard and fast. That’s what we got today, and that’s why we went long on Goldman Sachs (GS) at $156/share.
Here’s the NASDAQ and S&P Charts…
