A reader asked what my crystal ball shows …
If I knew … I’d be a lot richer !!!! 🙂
It is a VERY uncertain time. Most of the people I follow are sitting in cash right now waiting for some direction. And I’ll be honest … I’m starting to think that is the right place … it is a tough market right now.
I’m mostly long right now, but am increasing my short positions as the days proceed.
Here’s what I see …
We should expect a very short term bounce (might have started today, but probably not for a few days) and depending on the strength of that bounce will really dictate the near term (next two weeks) results.
If today was the bounce … and tomorrow is lower which is likely … then expect a down week. And the fall might be hard … another 5-10%.
If tomorrow or the next day pushes up hard … then I would expect a good upside bounce of 3% this week and renewed confidence in the market and more upside in the coming short term (2 weeks).
It really depends on the strength of the bounce … most professionals are waiting for that to tell them which way to go. And once they jump in … the move will be swift.
My gut says that we are in for a tough few months … that although we may go up in the next week, I think we are either going to go lower (most likely) OR stay around zero … just a lot of whipsaws up and down.
I think there is just too much uncertainty and nervousness right now with QE2 ending and summer coming and economic reports coming in low and the ‘smart money’ is sitting on the side lines. Until that uncertainty gets quieted which probably won’t happen until July or later … I don’t expect a huge push up.
Does this help???