This morning the markets opened lower once again, going down and hitting the exact mark I called a few days ago here. We then bounced off on account of the bottom pickers and rallied up nearly 5 points on the S&P. More disappointing housing and durable good orders came out prompting the move downwards. So what now? With mounting unemployment, bad economic numbers and a sickly looking stock market the economy is surely looking bleak. It is important to remember that big investors like Warren Buffet thrives in these conditions and start actively buying when the markets are down. The markets need to reverse around these levels for a drop below 1010 on the S&P would really shatter investor confidence. Other than bottom picking I don’t see any good reason for a rally, but as we’ve seen rallies do come when they are least expected simply based on perceived value.
Morning reflections 8/24/10