David Schrader

Selling Over? I'm Just Not Buying It.

Guess what folks.... nobody really has a grasp on the extent of these economic issues. The only real question to ask is this: where is the current risk/reward worse? Is it in being net long and seeing a serious and rapid decline in asset valuations OR in being net short/in cash and seeing a rapid increase in asset valuations? What's been happening when the headlines are positive and how about when negative?

If you choose to examine this on your own, you'll find out the answer on how the market is feeling on a day to day basis. That recovery the other day, in my opinion, should not be fully credited to the 75bp cut but instead to market participants who realized that there was no legitimate reason, at that point in time, for such a rapid and significant market decline. Therefore they went long ASAP to punish the sellers for their overreaction. Don't be fooled into thinking those 75bp are going to change anything significant in the short term.

A wound is still a wound if you bandage it up. Time and internal healing processes are the only things that can mend it - neither of which have occurred as of yet.