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Afternoon update



The only thing coming faster than the bids for the spending a day in Minyanville for charity is the various proposals on how to resolve the Iraq situation. I am careful to use the word situation because I frankly don't know what the hell it is. The only thing I do know is that no matter what you call it, it is a mess for the markets. Each new headline brings a fresh reminder that the only difference over the past several days is the market is no longer near-term oversold.

Given that was the only good reason I heard given for the bounce a couple weeks back, what would be the reason to be aggressive on the buy side considering:

  • The geo-political front is more worrisome than ever,
  • The Transportation and Bank indices technically look awful
  • Todd's outlined the proximity of the Semi's to a stochastic sell signal
  • The intermediate-term indicators have yet to come close to extreme levels seen at prior important low points in the context of the current bear market.

    It truly seems that it is the absence of buying that is the story here vs. the aggressiveness of selling. If this market was getting pressed it would be down a heck of a lot more given the above factors. Until there is a great reason to buy and to keep buying there must be a fundamentally attractive market (either by lower valuation or much higher earnings) or a real washout on the intermediate-term indicators. We are clearly closer to the second than the first, and I will update you if there are any changes. So far there isn't, but I am keeping a sharp eye out.
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Great to see the Citizens focusing on the Auction - even in the toughest environments there is something to smile about.
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