Stocks Fall on the Ides of March
The market is going
to get weirder before its back to normal. Yesterday the SPX closed below
1301 support, which indicated it wanted to move lower today. The Nasdaq
fought its way back to 2700 support but barely. The action dictated the
indices would likely move lower towards my 2600 and 1250 targets.
Then Japan collapsed.
Today is going to be chaotic. The Nikkei is down 9%. That is on the
heels of a 5% decline Monday. Most other Asian indices were down, but
only 1%-2% declines. Europe has similar losses, although most European
indices trade 2%-3% lower with Germany in the lead at 3.99% down.
We moved mostly in cash last week as the market direction became
unclear. The portfolio holdings are equal weighted long and short - and
our short will do very well today. Our large cash balance, which got
larger after our impressive performance since August, will start to go to
work today.
Oil is likely to move back below $100. The dollar
is also likely to rally hard. Gold may even falter. I was thinking about
a scenario yesterday. It is strangely similar to today, where everyone
wants safety assets. But not safety investments.
I concluded the general majority would lump gold into both
strategies. Gold and safety seem to go hand in hand. But gold is not able
to be spent and to me that is the measure of a safety asset. My
conclusion was that other currencies would fall when measured in dollars
but they would relatively rise to gold.
Financial theory will be in action this morning.
The ides of March strike again, but this time it's the market that
will be assaulted. The selling will be nasty, but let's not let it sway
our gameplan. We know our support levels to watch.
Watch
List
The TradeMaster Daily
Stock Alerts watch list is
bullish again but cautious except on bonds and technology. For a full
list of our trades and video of our current stock watch list CLICK.
