- Oct 12, 2009
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Sitting on the QQQ waiting for Monday. That and some silver and gold accounts I bought Friday for a 27% discount over Thursday's close.
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Often times, when the market is in meltdown mode, Mondays are really bad, especially when Fridays close on the low, and the open on Tuesday continues the downward trend. Then, around mid-day on Tuesday, the market reverses and there is a violent reversal to the upside.
I don't know if that will happen today or not. I can't give you any fundamental reason to buy stocks, other than "the economy isn't falling apart - yet." However, sentiment is terrible, which means we could be setting up for a good bounce.
As I thought might happen, the Dow ripped up higher into the close, rallying nearly 400 points in the last hour. I took all my shorts off early afternoon. Whether it has any staying power, that remains to be seen.
Such rip-your-face-off rallies are common in bear markets. I wouldn't be surprised if this went on for a few more days. But I think, until proven otherwise, all rallies are to be sold or shorted.
Toro net retiree dissavings will keep getting worse until 2023. I don't think the rules of thumb since 1939 are of any value at all in this market.If you believe the profit margins, stocks are very attractive here from a long term perspective. The median price earnings ratio of the Russell 3000 is 12x, well below the long term average of 15x.
However, I think PEs will get to single digits and I don't know if I think the margins are real.
Personally, I think anyone that is invested in stocks (either long or short) right now is a fool. Why play with fire? I am content to sit in cash and short term treasuries. I may not earn much, but I won't lose much either. There will be a time to buy, now is not it.