{"id":4875,"date":"2011-09-23T07:18:47","date_gmt":"2011-09-23T12:18:47","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=4875"},"modified":"2011-09-23T07:18:47","modified_gmt":"2011-09-23T12:18:47","slug":"before-the-open-sep-23-3","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=4875","title":{"rendered":"Before the Open (Sep 23)"},"content":{"rendered":"

Good morning. Happy Friday.<\/span>
\nMarkets around the world continue to sell off. In the Asia\/Pacific region, South Korea closed down almost 6%, Taiwan is down 3.5%, Japan is down 2% and several others are down at least 1%. In Europe, Switzerland is down 5.5%, Stockholm 3.4% and several others are down 2-3%. Futures here in the States point towards another relatively large gap down for the cash market. <\/span>
\nI know I sound like a broken record, but at least I can’t be accused of being wishy-washy. The uptrend that began in March 2009 is over. A top has been put in place. A downtrend is underway. My long term bias is the the downside (it’s been to the downside for 7 weeks); my short term bias has jumped back and forth between up and down based on what was happening at that exact point in time. I believe lower prices are coming, possibly much lower prices. <\/span>
\nTo repeat what I wrote yesterday…when the market drops, there is no such thing as a safe-haven because everything gets pulled down. Traders sell their winners to pay for their losers or to cover margins calls. Nothing is immune. The strongest stocks…the strongest sectors…the companies that sell basic things we must continue to buy…the companies that are on the cutting edge of technology…it doesn’t matter…nothing is immune during a downtrend. You don’t get a pat on the back for only losing 10% when the market drops 30%. You may feel great for beating the market, but you’re still down. If you’re not comfortable playing the short side or buying reverse ETFs, sit on the sidelines. Your goal is to make money, but in times like this, your goal is to also not lose money. <\/span>
\nAlso..the big problem during the financial crisis (purely from a market movement standpoint) was leverage. Hedge funds that had $10 billion under management had $50 billion worth of positions. That meant if their portfolios dropped 20%, they’d be completely wiped out. The reason I say this is to remind you that you don’t know where an air pocket is. You don’t know when a fund will cross a threshold and suddenly have to dump billions of dollars of stocks [at the market]. When the market drops a couple days and you think it can’t go much lower, think again. It can. In fact it can go much lower. And if one fund liquidating causes another to cross a threshold, well, you get the picture. I’m not predicting this. I’m just saying be careful bottom fishing.<\/span>
\nMore after the open.<\/span>
\nheadlines at Yahoo Finance<\/a><\/span>
\ntoday’s upgrades\/downgrades<\/a><\/span>
\nthis week’s Earnings<\/a><\/span>
\nthis week’s Economic Numbers<\/a><\/span>
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