Last night most of Asia sold off in reaction to the US market's Tuesday Trade. Europe is following through as well this morning.
Both SPY and QQQQ were up slightly and have taken the CPI report well to move up a little higher. The CPI adds some validation to the notion that the PPI was a blip, but I think it also means that CPI is not picking up the areas of the economy where inflation exists, like healthcare.
Sometimes the market can be better off after a selloff like yesterday. My gut tells me that is not the case now, I could be wrong.
I don't know how serious this may or may not become but as a quick reminder, bear markets don't usually start with crashes. I would think a crash would be no different if it happens this time around. This is not a prediction but ties in with past writings of relying on logic instead of emotion.
Usually sharp selloffs snap back sooner than people expect, think Asian contagion, Russian Ruble & LTCM and 9/11. That may be worth remembering.
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1 comments:
None of your snapback examples occurred while the Fed was hiking rates. The best strategy in each of those cases was short until the Fed cuts and then buy.
"This time it's different" is a difficult argument to make but the current stance of the Fed and increasing reluctance of central banks to finance U.S. borrowing could be a pretty big impediment to following the same course of action.
I don't have a problem with your point so much as your examples.
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