It Didn't Take Long to Prove Us Wrong
So much for lighter volume. So much for the PPT battling successfully against the building selling pressure. If you read yesterday's post you remember we thought lighter volume would mark a bit of an upswing this week before Labor Day. The Dow promptly plunged 469 points. Curses, foiled again!
The fact is everything we thought might happen before Labor Day didn't. Instead, the Chinese stock market, the other Asian markets, the European markets, and now the U.S. stock market are taking a drubbing. Even the assets that typically counter the movements of stocks - for example long treasuries - aren't playing along as we might have expected. Indeed, with the long bond barely registering gains, you might naturally expect that, ah, some of the astute investors out there are turning to "real" money - gold. Certainly in places like China and other Asian countries, you'd expect a rush to the safety and solidity of gold. If it's happening, it's not registering the way one might expect.
All we can conclude now is that selling pressure simply overwhelms all attempts to stem the stock market slide and has now spilled into other asset classes that would offer some degree of protection. What sort of disaster awaits us now? Nothing points to an easing, certainly not a turn-around. And yet, it's hard to fathom that prices will just continue dropping day after day after day.
What's unnerving is that, while balance (having money in other asset classes that typically don't follow the direction of stock prices) has helped, we're not seeing the sort of help we'd have gotten in the past.
Is everything up for sale now? Where's it all heading?
And here I thought a few days respite awaited me in the traditionally quiet days before Labor Day. What do I know?
The fact is everything we thought might happen before Labor Day didn't. Instead, the Chinese stock market, the other Asian markets, the European markets, and now the U.S. stock market are taking a drubbing. Even the assets that typically counter the movements of stocks - for example long treasuries - aren't playing along as we might have expected. Indeed, with the long bond barely registering gains, you might naturally expect that, ah, some of the astute investors out there are turning to "real" money - gold. Certainly in places like China and other Asian countries, you'd expect a rush to the safety and solidity of gold. If it's happening, it's not registering the way one might expect.
All we can conclude now is that selling pressure simply overwhelms all attempts to stem the stock market slide and has now spilled into other asset classes that would offer some degree of protection. What sort of disaster awaits us now? Nothing points to an easing, certainly not a turn-around. And yet, it's hard to fathom that prices will just continue dropping day after day after day.
What's unnerving is that, while balance (having money in other asset classes that typically don't follow the direction of stock prices) has helped, we're not seeing the sort of help we'd have gotten in the past.
Is everything up for sale now? Where's it all heading?
And here I thought a few days respite awaited me in the traditionally quiet days before Labor Day. What do I know?
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