Market View: House Of Cards
August 6, 2008 7:19 PM
The higher we go here the increased chance of a serious plunge, IMO. This thing is a massive house of cards, as I see things. All of the lows the last 2 days have been SMA related other than the gap low of yesterday. This is not good on any level. Once the trend turns, this may get very ugly, in a hurry. We saw the same exact nonsense before when the market got crushed a week ago. You will have to be very careful long much higher, IMO. Once this turns, and we get more bad news, which is coming, eventually, there is once again nothing to stop the fall.
Every time i see these patterns i believe it is nothing more than short covering. If there is real buying I tend to see very clear “buy points”. We definately do not have any of those. This is short covering and related to the no “naked shorting” rule that was extended on the large financials, I believe. If and when the naked shorting is allowed again, they are going to rip this thing apart. This still seems to be a “fabricated’ rally because of that.
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