A Trading Low or the Market Bottom?

By Todd Harrison  APR 09, 2008 8:00 AM

35 reasons why March lows are an opportunity, not a bottom.

 


They say time heals all wounds. For investors around the world, they hope that time has arrived.

On the back of massive government intervention and JP Morgan’s (JPM) federally orchestrated takeover of Bear Stearns (BSC) - not to mention the 1000-point rally off the lows - the question everyone wants to know is whether the worst is behind us.

Is the incessant supply that dominated the last six months simply taking a breather or will we look back at March, much as we did in 2003, wishing we had the wisdom to identify the classic signs of a meaningful bottom?

It’s within the probability spectrum that we’ve turned the corner and the market will climb the wall of worry. To truly appreciate that potential reward, however, we must understand the magnitude of the attendant risk.

In our never-ending effort to provoke thought and provide smiles, Minyanville offers 35 reasons why the March lows were an excellent trading opportunity but not the ultimate bottom.
 


To be sure, the combination of massive fiscal and monetary stimuli—along with monstrous intervention—could be enough to shift the benefit of the doubt from “a” bottom to "the” bottom in a normalized marketplace. The trillion-dollar question, quite literally, is whether we’re indeed living in traditional times.

I remain of the view that this is the most significant stretch in the history of the financial markets and when our grandkids study this period, they’ll do so with a sense of nostalgic lament. It’s up to us to decide the particulars of that perspective and our relative standing in the grand scheme of tomorrow’s dreams.

R.P.

No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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