There were some "strong" opinions from readers on my macro piece from yesterday, some taking me to task for not expressing a clear position as to where I think the market will go from here.

Here is how I responded to one of the comments:

“As far as your perception that the article may suggest that the markets will either go up or down, a couple of points: our goal in the 'Ville is not to tell readers the market will go up, or the market will go down.  Rather it's to lay out the factors that may push it up, and those that may push it down.  It’s up to the reader then to come to his/her conclusions and the desired risk exposure to either side.

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Furthermore, the key point of my piece was indeed that, right now, I do not see making the “right” directional call as being the best risk/reward approach; rather my sense is that being positioned to benefit from violent volatility (whether it be up or down) is where the best opportunities are.”

The reason why I continue to look for high two-way volatility is that the type of psychology/relief driven rally we saw yesterday still lacks fundamental, structural and technical support. And today’s lack of follow-through only reinforces my view.


Random Thoughts
 

• Prof. Shedlock has shared a number of examples readers have shared with him regarding the state of commercial real estate; most of these anecdotes address problems is secondary markets or the suburbs of key markets, and all of them suggest that things are heading south fast, and are in fact worse than the way I see them. Aside form the usual caveat that I could indeed be wrong, I will offer that in my assessment I do allow for meaningful problems in some secondary (and non-secondary) markets.
  
  We are already seeing these kinds of issues in the Washington DC area. My sense is simply that the CRE/Office market is not afflicted by the structural failures that are collapsing residential real estate. It does not mean that there won’t be pain and losses in CRE, I am simply suggesting that I do not see a market/nationwide collapse requiring bailouts the likes of which we are seeing in the residential space.
  
  
• I jumped on the NYSE Euronext (NYX) bandwagon on a valuation basis and if I were to be consistent with my original thinking I should probably get off that train now. However, in the interest of keeping long exposure against my many index puts, I am giving the chart the benefit of the doubt and letting my position ride.