Thursday Outlook: Over the Waterfall?

What is it about “Big Wednesday” wipeouts that I find so intriguing anyway? After living in Hawaii as a young man for 35 years, I can relate. And I’ve posted various Wednesday wipeouts more frequently recently than I ever expected.

The point is markets are on the verge of a waterfall-like collapse.

Even with conditions as oversold as they currently are, an epic [pardon the surfer lingo] collapse could happen. This is the result of all the news you know by now. Why regurgitate it here?

The government may have little ammo left, but don’t be surprised if they start buying stocks and index futures to prop up markets. After all, as I’ve been saying, their attitude, 'In for a penny, in for a pound', means they’re committed to do just about anything.

I’d say we’re exiting the denial phase and entering capitulation where a “get me out” mentality dominates. This comes from all manner of de-levering activities plus redemptions from mutual funds, financial advisory accounts, hedge funds, endowments and so forth. This selling runs all across all asset classes except bonds and the dollar.

Investors want safety and cash.

Volume expanded yesterday while breadth was as miserable as one would expect.


























































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