Ask Alice, She Should Know!

By David Fry | December 04, 2008 | 8:41 PM | 0 Comments

Have you ever accidentally deleted an entire word document without saving it? I just did that thinking I was deleting an image but not the document. So after two hours of writing I’m starting over and this will be shortened. It’s too bad since I was having fun with it.

Anyway, today we just witnessed more of the kind of lethal volatility that defines this market.

I was reading the news this morning and couldn’t find a scintilla of positive news. Layoff news was impressive and dominating the headlines as were crummy retail reports.

When markets opened down it didn’t surprise but then in came the bulls to bid things right back up. They were following-through on momentum from the previous two days. Not much took place once the propping was done until 3 PM when powerful selling took over. Any news? Not really.

Volume was about the same as yesterday but breadth reversed and is well presented by our man in Geneva.

Well, this was a frustrating effort since I lost the document just as I was ready to post it. No, I didn’t save it initially. Anyway, two hours down the drain and that’s no fun.

Every market cycle has its goats and rock stars. Among the current stars is Meredith Whitney from Oppenheimer and economist Noriel Roubini. He chimed in today with his suggested solution to auto company woes TLT,UDN,UUP,GLD,SPY">HERE.

The markets remain highly volatile and manipulated by professionals whether they be trading desks, hedgies or the government. It’s hard to know which since no one will raise their hand on that one. Even Crammer suggests this is happening meaning it may not be true right?

Tomorrow we get what passes for official employment data. It shouldn’t look good obviously. But, if bulls are sitting on the tall stack they can spin it to suit their needs. A bad number to them will mean more stimulus and lower interest rates. A better than expected number will mean things aren’t as bad as everyone thinks, and so forth.

It is an Alice in Wonderland world where logic and market performance rarely meet. That’s why I’m glad to follow technical and systematic rules.

Many want action. Sometimes sitting things out is the smart move until things gain some clarity and lose some heat. It’s like wrestling alligators in these conditions as it’s too hard to manage positions within this volatility. After all, most individual investors feel incorrectly they must compete with professional portfolio managers who are generally paid to be consistently fully invested. Your advantage is to do the opposite at times.

If you wish to listen to our podcast it should be available on Sunday for non-members HERE.

Have a great weekend.

Disclaimer: The ETF Digest has no positions.

PS. I was thinking Orwell but then turned to Grace Slick.