Re-test: check, Dead Cat Bounce: check, The Bottom: ?
I'm tired, I've been working hard to keep folks around even. I don't know what the bottom is. Increasing the money supply a ton seems to be the right move. Stagflation is a better option than depression, and I think Ben and Pauly are taking us there. Congress needs to realize that BK in the auto industry is a bad idea due to chain reaction that would ensue. What Congress ought to do instead of giving the car companies money though is du two things:
1. Absorb all pension costs.
2. Order a million additional cars each of the next three years with a lot of the money upfront instead of on delivery and rebuild the federal car fleets at the leisure of the industry as they reduce their labor force another 10-15% as a condition of #1.
Anyway, I'm covering my shorts probably tomorrow. Though not reinvesting the cash just yet. That'll put me at about 10% agriculture, 5% oil, 30% equity, 20% debt, 35% cash (spread among dollars, yen and swiss francs) and down less than 20% ytd across the board. So if we get a good short term rally, which I think is likely, I could actually end the year about even. That would be a hard working zero year no doubt.
I'm expecting massive dividend cuts in financials the first half of next year so I don't see the rally lasting long. I am thinking we'll skip off these bottoms at least 2x-4x over the next few years, so good traders could do well, as will those with cash who gradually establish long term conditions.
Oh, if I have to make a prediction, I'd say 7200s on the Dow and S&P 500 about 720 as new lows. Will those hold long term? Hard to say, but I do think we get a sharp few month hope rally after hedge funds are done liquidating in the next couple weeks.