Before the Open (Aug 10)

Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly up…Australia, Hong Kong, Indonesia, New Zealand and Taiwan rallied more than 2%. Europe is currently mostly up…Austria, Belgium, Germany, Norway and Stockholm are up more than 1%. Futures here in the States point towards a moderate gap down for the cash market.
So the market finally bounced yesterday. Traders have been looking for a such a bounce for a couple days. I stand by the comments I’ve made the last few days that 1) the selling pressure is not a pullback within an uptrend; it’s the beginning of a downtrend. If the market wants to prove me wrong, great. I’ll gladly change my bias because it’s easier to make money on the upside anyways. 2) A bear market could be worse than the previous two bear markets because the US is in no position to cushion the blow. The last two market tops (2000 and 2007) were characterized by strong or moderately strong housing, low unemployment, a general good feel in the country and a high Fed Funds rate. The stock market and economy had a cushion and the Fed had the full use of its tool box to dampen the blows. This isn’t the current case. Housing sucks, unemployment has been above 9% for a long time, the mood in the country is negative, and the Fed Funds rate is already at 0. We aren’t in a position to deal with a stiff bear market, and this is why it could be worse.
Given this, after the close today, I plan on forcing myself to take a bullish stance, to argue a bottom has been put in place, and that the indexes will rally back into their ranges and then eventually move up. Right now I don’t believe this, but to prevent myself from getting too bearish or too excited about shorting a bounce, I will force myself to consider the bull’s case.
Also, as I stated yesterday, this bounce will not just go back to the previous support levels. That’s too easy; that’s what everyone wants. It’ll either fizzle soon or go a little farther and last a little longer than anyone believes is logically possible.
Be nimble. Be open-minded.
headlines at Yahoo Finance
today’s upgrades/downgrades
yesterday’s sector performance
this week’s Earnings
this week’s Economic Numbers