Tuesday, January 22, 2008

Fade the Rally

Over at MarketBeat, David Gaffen collected a couple quotes before the open:

...“The 1987 template is really very important here,” says Doug Kass of Seabreeze Partners Management. He likened the overseas crash yesterday to Black Monday in 1987, which was followed (in both cases) by a Federal Reserve interest-rate cut. “We could end up higher on the day, considerably higher.” That Tuesday started with a sharp rally — which was sold into — and the markets ended the day higher (more on this can be seen here).

But first, there will be selling, as futures catch up to the nasty action overseas; of late the Dow futures were down 465 points and the S&P 500 futures were off by 40 points. “Hopefully at this point the market will begin to stabilize,” says Doreen Mogavero, president and CEO of Mogavero Lee & Co. “We’re going to have a down opening, and from there we’ll see how things look.”

Marc Pado, chief investment strategist at Cantor Fitzgerald, casts his lot with the turnaround notion, saying that “we may not get a reversal day out of today, although it would be nice, but I think today’s low shortly after the open should be viewed as a buying opportunity.”

I had a comment (a bit more pungent that my usual style):

This isn’t 1987. The structual problems that Greenspan, the bankers, the product packagers and traders created is a lot deeper.
They’ve left a flaming bag of crap on the doorstep and although the homeowner can put out the fire, there’s gonna be s*** all over.

Comment by Climateer - January 22, 2008 at 9:49 am