I much appreciate your insights, DI and Uh. A few more random and superficial observations from my side:
- The last day of the quarter had BIG volume, especially on the Nasdaq. Probably just end-of-quarter action, nothing worth analyzing.
- The Banking indexes show absolutely NO sign of bottoming. Damn! Until that happens I'd venture to say that any counter-trend rally won't go far. If the financial sector recent history is any indicator, the major indexes have further to go down. The DJ Banking index has crashed through 2002 support and is now at 2000 levels. This scares me, FWIW. (But, I scare easily.)
- Transports had a poor week and have come down to their 200-day MA. Watch the action here?
- The Russell and Nasdaq indexes are not close to testing their Jan / Mar lows; so, quite a bit of divergence from the Dow and S&P. I don't know how to read that. This makes trading more difficult; back in Jan and Mar all the indexes were in synch; not any more!
- Treasury rates are far above their spooky March Bear Stearns levels. Lots or room to run here - but I have zero insight about what's going on.
- I don't expect to see the Vix move up unless the S&P breaks support. On Friday it closed a the day low.
I also worry about counter-trend rallies, which tend to wreck havoc on my portfolio. Since the indexes are all over the map relative to key support, it's tough to call.
Should we get a S&P break of this support level and should the Vix start to shoot up, the signals should be clearer. I'd use that event to start positioning for another bear market rally. So far I don't think this is actionable and so am content to ride my current allocation. No big bets.
I also noted the Siemans news. Don't know much about it; it could just be an effort to clean house by a good company so to remain competitive with the likes of GE. Don't forget that they're coming off of an expensive bribery scandal. It could be a one-off, don't know.
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PS
My biggest concern: another step down for the USD. Other things I can more or less handle.
