I know that I said I really prefer to make my purchases at the end of the day, but this midday ‘rally’ is really tempting me to add to my $IWM short.
Question: why would this consolidation be any different than the previous three during this correction?
Answer: it isn’t
I know that now the U.S. stock exchange is kind of being held hostage by the events in Europe…but I’m sure you have noticed, there are plenty of problems for us to deal with here as well.
By the way, I hope you have taken a moment to away from charts of your “market leading” stocks to take note the price of copper. If not, you should start to pay attention, because it has moved in lock-step with large-cap market leaders as they marched higher since 2009. Check out what has happened to copper over the past few weeks. I don’t know much about macroeconomics (read: nothing), but I do know that when these types of divergences appear, usually it’s trying to tell you something.
Should we trust the price of a company that basically makes toys for grown ups? Or, should we trust the price of a basic material, the price of which has basically been a primary indicator of economic health the past two years?
Maybe the days of copper being a leading indicator are over…or maybe equity prices are about to get punched in the face, $NFLX style. Anyway, in the time it has taken me to write this stupid post I see that $IWM is back to heading south again, so I might have missed an opportunity to add…oh well.