Update – Many people were asking me for a ‘Where I think the Market is Going’. I would like to ask those to take the time and purchase a few books. The first being ‘The Wallstrip Edge‘. Put aside the title and do yourself a favor and own it and share it. It offers everything I can think of about catching big moves and avoiding disasters. Next, order and read ‘The Stocktwits Edge‘ which will document 40 plus different strategies for investing and trading so you can expand your knowledge of the markets and find other people from the Stocktwits stream and styles that match your risk profile.
For three days I have tweeted….’GET OFF MARGIN’ …of course it is lost in a sea of messages, but hopefully you have gotten the point. My friend Joe Fahmy reminds me all the time to ‘Respect Risk‘.
A panic is now in the air. It is hard to smell it from lovely Tuscany, but it is out there in the wild now.
Dynamic Hedge describes it as EPIC, RELENTLESS. SELLING It did feel like that from my wireless connection to the tape.
The $VIX had it’s biggest up move (35 percent), since 2007. That’s not something to ignore.
We had the BIGGEST ‘one day’ crash since the flash crash. Woodshedder has a post titled ‘Everything You Ever Wanted to Know About Today’s Crash‘ that I liked.
I would add that with all that data and all the banter, The $SPY is just back to November and April 2010 prices in the index. We have been here before, more than once.
Take a look at these two screen shots:
1. Heat Map – a Sea of Red.
2. The worst performing countries in the world – the worst of the worst being Italy, Austria, Sweden, France
On Friday, before I left for Italy, I mentioned I am always bullish, BUT not through the ownership of ‘Commom Stocks’ . To me, there had been too narrow a list too choose from and I was manly sticking with my winners until price took me out. That is happening fast, NOW.
What has changed in the last few weeks. For one, Countries are bankrupt but people are now starting to think about the ramifications as the US dragged out a debt ceiling debate. The markets hate lazy, stupid, slow decisions. We let all the bankruptcies get to the front page all at once.
People are asking me what’s next. I will try and answer on this post and provide some great links, but NOBODY knows what’s next. Of course thereare insiders, and always will be, but their lives are miserable in the hunt for the next nugget or the lives they lead avoiding being caught.
My best guess at what’s next is more summer pain and volatility. August Wall Street and European vacations will not be stopped after this week’s carnage. Hedges will be used and with lighter trading, more volatility. There will be new insane predictions as the media looks to fill blank copy and you should continue to ignore price target or television. DO LESS!
Start building lists. There are companies and whole industries that will come out of this market panic stronger than ever and they will begin showing up on all-time high lists.
I will lead with Ivanhoff with his post on what to expect from here. Ivan is a clear thinker, watching thousands of prices and making the madness organied.
More on retail list building into panics from my pale ‘Talented Blonde‘
My friend joe – Upside Trader’ chimes in with this fun post . Joe walks his customers through theses types of markets all day and every day.
My friend and longtime market veteran Jeff carter says we are due for some Ben and maybe than will be ok.
Kidd Dynamite says, that no matter how little equity you think you have, pain is happening
Joey, ‘Downtown Trader’ has a reminder for us traders….suit up and kiss the ring of the trading gods and ‘repeat after him’ daily!
My freinds at HighChart Patters, say waiting is in order. I agree with this while I build a killer list of industries and leaders I want to own when conditions improve.
Today, I added Google. I was watching the meltdowns in France and Italy. Italy is back at 2008 lows. That is rather frightening considering the global rally of the March 2008 lows.
Bank of America looks like toast.
Things look bleak for $rimm.
Europe has a Euro that should be called a $GYRO because I would rather be eating them than spending them on overpriced goods here in Italy.
Things are way out of balance and the markets can work very quickly when t comes time to make a statement. This is one of those times. You can add some good names, but give them a wide berth.
Be prepared by having enough cash that you are not staring at your ‘equity value’ line in your brokerage account.
Finally, here are some real technical lines in the sand from @zortrades, a man whose work I trust greatly.
No one says you have to pull any triggers tomorrow. I do think Monday will see me pulling a few.