Hope rules end of Q1 …
And again the market plays the card of hope …
After Q1 is booked … and with it some losses …
Everybody is bullish and confident again (unbelievable!)
Still there is NO VISIBILITY at all, how long and deep the recession might be …
NO CHANGES so far in the housing market or at the credit front …
BUT … New quarter … fresh(!) money (really???) …
It is still sentiment (bearish talk, but bullish action and DENIAL) against reality …
Here some (IMHO stupid) reasons, people buy here and now:
- Due to FED rate cuts, economy is set to recover starting 2009 … and as the market escompates … BUY
- Sentiment can not get worse … so Buy
- If you have been in cash the first 3 months and invest now in the indices … you will have a stellar outperformance … so BUY
The reality looks different:
- The U.S. market outperformed because the FED FLOATED the market with liquidity, so it could be time to SELL
- The credit crunch is still at full swing … so better SELL as FED’s ammunition is getting less
- The banks / financials are still at danger of a real meltdown and face AGAIN their recent quarterly game of having huge write offs and then chasing new money, so I better sell
- People still don’t have a clue, what is really going on … look for example: UBS started CUTTING values of auction rate securities … this shows the real trouble and will be followed by BIG TIME litigation … today is the FIRST DAY, that I have REAL DOUBTS, that UBS and Citibank can SURVIVE
To be honest … to convince me to buy this market strategically … I need to see change … and real technical signals …
I learned one thing for sure …
To survive these markets you need money, discipline and you must NEVER HOPE!!!
Tags: Citibank, credit crunch, Q1, sentiment, UBS
