I'm the first to say that this market should be much lower than it is. But nothing goes straight up and straight down without any counter rallies/moves in between.
We still have support below us and while the market didn't react to Obama positively thus far, there will be speeches coming that temporarily cause the market to rally some. How about another hint at halting home foreclosures. That's an attempt at price fixing and positive for URE. I'm completely against price fixing and don't agree with Obama, the Democrats, and many neoconservative Republicans. But I can't change it so I might as well play along. I think the market overreacted today because we were off yesterday and there was such selling pressure at the beginning of the day due to people wanting to sell after seing Asia and Europe drop. I'm very bullish on Gold but am realistic and think we have another pull back. I don't trade core positions that I hold for the long term, e.g Gold, but I made money trading FAS, FAZ, ERX, DIG and SRS.
You really think that URE won't touch $3.50 ever again? Even GM rallied from $2.50 to $4 when it was more than obvious that this was almost a financial suicide move and Vegas would provide better odds. I'm bullish on URE for the short term at these levels. Sure it could go a bit lower but I think we'll see $3.50s again soon.
Some Asian markets are hinting at hitting a temporary bottom and might rally again from here. Nikkei currently shows a pattern I could see us following for tomorrow. Initial down to low 7500 followed by a rally up to 7750 or something like that. Maybe rally right away, I don't know. But I know better than think that this will go straight down. Nobody wants to buy URE right now but when the momentum changes things will change quickly with those ETFs. Look at FAS a couple weeks back when it rallied from $7.45 to $8.60 within a matter of 60min. Sure there was news out about the Economic Stimulus but to think that URE will go straight down from here without a major bounce is a bit out there if you ask me.
Also keep in mind that about all negative news is out there for now. I know that more will come but combine all that negative news with a market holiday and of course the following day (today) will be way down. I just don't think that this trend will continue for the next 7 days.
Thus far, the past three trading days were the worst for URE since early November. And even then on Nov 13th there was a bounce where the high for the day was $1.35 higher than the close the previous day. Sure, the low was lower than open that day, but between the low and the high that day, there was a $2 trading range on URE that closed at $6.69 the previous day. I"m not saying that URE or any other of those ETS are good for long term hold but there are potential great trades to be taken along the way. Nothing goes down forever in a straight line and a perfect example is the USD. Yes, it will go lower but you can't ignore the potential counter rallies along the way.
I had over-estimated Obama's power to rally the market. Instead he did the opposite. When I got into URE I thought it would rally but it has gone down ever since. Yes, it has dropped quite a large percentage so should see some bounce. I will be glad to get out at $3.5 with a loss.
I sold a portion of my core position in gold today. My long term outlook for gold is very bullish but I wanted to switch out of GG into something else. Still have a bit of GLD and CEF (which I prefer.) Will get back into gold on a pullback.
I really hope Obama and Geithner have learned their lessons. Better come out with specific details and plans that the market likes. Obama's mortgage subsidy is a total bandaid so I really wonder how favorably the market will react. Geithner, on the other hand, should just try the bad bank concept after he stress tests all the banks for solvency. We all need to get this pain over with a little faster.
I agree that we should get this pain over with. As far as I'm concerned we need more free market, abolish the Fed and let the demand and supply of savings/loans set even short term rates. We don't need a quasi-private entity with a conflict of interest in charge of the countries monetary and economic systems. So I would have been in favor of absolutely zero bailout and not dropping interest rates at all. But what do I know...
As far as tomorrow and the next couple of days are concerned, I think URE will hit $3.50 - $3.75 again.