Now that all the indexes have broken to new lows you would think it was a guarantee of a new bear market.

However, now that the quarter is over and all the end of quarter window dressing is over it may be time for a bounce. For this quarter it appears funds wanted to raise cash going into the quarter end or maybe they just wanted to get rid of some losers to clean up the books before the statements went out.

Either way the Dow closed under 9800 and S&P under well 1040. This should be a sell signal for a new bear market but once you start assuming logic applies to the market you will normally be wrong.

I am not brave enough to sell a bunch of puts on Thursday just in case the end of quarter trend reverses. If the trend reverses it may be just because the market is so oversold already for the week. I believe any bounce will be sold ahead of the payroll report but who knows, funds sitting on cash may be willing to speculate on a better than expected report.

There is no rush to race into the market. I would rather be patient and pick our targets than impulsive and race headlong into disaster.

Still flat and watching from the sidelines.

Jim Brown

Current Portfolio

No positions