Big Wednesday again? Heck yeah! I may as well go with this video today for the
image. Only the best can ride waves like this guy and it segways fittingly to
todays market environment. And, no, even in my youth I couldn’t do it despite
many years in Hawaii. So I’m just sitting on the beach waiting for waves my
size.
One observation I’d make is I’ve never seen weekly and monthly
RSIs [Relative Strength Index] with readings this consistently low. This is how
extremely oversold conditions are. We are witnessing history in my opinion.
Conventional wisdom, better known as hope, argues that markets are just
retesting their lows. One more day like this and we’ll be there. A failure to
hold those and we could experience a sharp waterfall leg lower. That’s scary.
Volume is still relatively modest but breadth is horrible. The new lows
just keep building.
I’m not going to post all the sector charts today. We’re
looking at the same thing from chart to chart.
StockCharts is having more issues today since many ETFs
have moved from the NYSE/AMEX to ARCA. They don’t have today’s data and won’t
until tomorrow. Therefore I obviously can’t highlight those. But, as I’ve
indicated the picture is the same from market to market and sector to sector.
It’s said hedge funds saw $100 billion in redemptions last month. That
goes with probably the same amount for mutual funds as investors scamper to the
sidelines to protect whatever they have left. Private money managers and
investment advisors are feeling the heat as well with clients demanding answers
that are difficult to provide.
I’m sad for the many investors who are
literally in shock at what has become of their savings and equity in property.
Investment advisors are also in shock as their business models and clients have
been victimized by the
Black Swan.
I’m as greedy as the next person and want to be a participant now. But,
risk management for a diverse set of subscribers, who for the most part aren’t
gun slingers, is as important as performance. So while we’ve made a little money
in 2008 we’re on the beach just waiting our turn for conditions that better suit
our skills. It will come no matter the direction.
Have a pleasant
evening.
Disclaimer: The ETF Digest has no positions in any highlighted
securities.
