Counting down the minutes until the quarter expires.
Tuesday's minor decline was a non-event in the overall scheme of things. All the indexes remain above initial support with 24 hours left in the quarter. It appears fund managers are going to book a major win for Q3 and probably for the entire year.
Remember, most mutual fund year ends are Oct 31st. That means funds need to restructure their portfolios in October and setup their tactics for 2010. Losers will need to be sold and some winners executed in order to offset the losses for tax purposes.
With Q3 earnings starting next Wednesday we could see one more bump into the earnings parade but I would expect fund managers who get a performance bonus are getting very nervous after a +62% rebound by the S&P. Time to take profits and lock in those bonuses. The only question is when? Do they bail next week or after options expiration and the first big week of earnings. Personally I would bail after expiration to get the most bang for the buck but I am sure they have some stop losses in mind should the market weakness appear to be spreading.
I am hoping for a big decline so that we can load up on our own plays. I hope it comes earlier rather than later so the November premiums will still be high. Until we get a pullback I am going to remain flat.
For Wednesday, no change, no new plays.