I always get a kick out of how market commentators suggest news should "already be priced into the market." It's never fully priced in a priori, and today is a prime example. Recall my stagflation post? This stuff is radioactive!
That's not to say there aren't frequent overreactions. If one sees the last ten-months as a correction "through time," you could argue that we are setting up for a nice-short term rally with a "W" retest-bottom ala March of last year, earnings and the Fed permitting. (Note that this was a common argument at the end of the tech-bubble in the early months of decline.)
On the other hand, if you feel we haven't seen enough cross-market capitulation and that the bad news is going to keep coming our way unabated, it's likewise easy to argue for a run to SPY $125-132.
Intellectually, I'm in the bear camp, but being an optimist at heart, I tend to look for the upside when we are this "oversold". As of right now, equities are off +/-2% of the day, but the VWAPs are being challenged to the upside. What are your thoughts dear reader?
1:30PM CST UPDATE: The Cumulative Tick is once again making a concerted effort to go positive on the day. Athough it has been relatively less predictive over the past three days or so, that's saying something given the magnitude of the repricing. See prior days' posts. Technology and Financials just look painful. Tech in particular continues to revert to the mean relative to last year's outperformance (semi's aside).
4:10PM CST UPDATE: Intel, ouch...
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