Moon Kil Woong

More Signs of Our Broken Market

Catapillar is doing the right thing, cutting executive pay and making not-overly excessive cuts to their labor force. Management voluntarily taking pay cuts even though they remain profitable is a sign of excellent management. I wish others were so good. If they ran GM I doubt it would be in the shape it was today. The uS should be funding good strong companies like it and IBM not garbage companies like AIG et al. Anyway, as I mentioned before I'm long Catapillar and a few other stocks as an inflation hedge just in case. Otherwise, I advise cash.

So your bearish calls are not wrong. Unfortunately volatility is dropping so you are getting burned on that. And fund managers like spending cash in the end of the year to briefly and often artificially pump up their performance by buying the stocks they own so they can pay themselves commission for making the right choice. This is called window dressing. I call it a self fulfilling prophecy of ripping off their clients.

Anyway, yes, a low volatility up day in the market is nothing to cheer about. Volume was about 60% of normal volume so it pretty much means absolutely nothing unless you have options expiring anytime soon.

Best of luck to anyone playing the market long or short. It is brutal.