Finally seeing some light at the end of the tunnel?
The US stocks market has been wildly volatile these days. One day it’s up 3-4%, and the other day it’s down 3-4%. Sentiment is still very weak, but it seems to me that the bulls are getting back into action, albeit very cautiously. I supsect currently this current environment is good for short-term trading. Buying whenever it’s down 3-4% in one day, and then selling it when it’s up 1-2% in the next few days may be a good strategy these days.
My bet is that we are finally getting close to the end of the subprime crisis. Bear Stearns is gone. It’s hard to believe that there will be more than one causalty in this financial crisis. (If there are more than 1 banks down in a crisis, then I suppose there is some fundamental problem in the financial system and we should definitely get away from any financial markets in a while.) So I believe we are actually seeing the bottom soon. I suspect stocks markets globally will be going up in the next one or two months.
On the other hand, even if subprime is over, what is coming next? The US economy will definitely be weak for a while… unless some miracle is going to happen. My long term view is that we are actually entering into a bear market. So maybe we should sell after the small rise in the next 2 – months before the bears are back again.
