Asian and European markets up this morning, some very strongly. I am assuming that this is a "relief" rally, as in "Whew! Am I glad that's over..." Uncertain how long this rally will last, but I guess anywhere from 2-6 days. As mentioned last week, the economic fundamentals do not look good (in the US - globally it looks OK for now). The liquidity tap, if not off, is down to a trickle, and this should prevent any meaningful rally in the markets. That is what makes this "correction" different from the past few. People were frightened. It seems unlikely that hedge funds will be wanting to increase leverage again quickly, and private equity firms will probably be wary of big new deals in this environment. Similarly, I don't see the banks lining up to throw money at these guys like they did only a few months ago.
The "crash" is probably over, however, I do expect this market to gradually grind lower for the next several months, at a minimum, maybe longer.
MARKET POSITION: SHORT (2 units)
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