Hello all, US markets are down sharply as I write this on a rumor……..an unsubstantiated rumor of an impending major bank failure. No idea if there is any validity to it whatsoever but that hasn’t prevented investors from selling first before they ask. If this turns out to be a false rumor then the snap back rally could be substantial as it would be a great entry point for those under-invested.
I’ve spent a great deal of time recently trying to discern whether this September will be as weak as its reputation. On one hand you have Doug Kass who has made some truly excellent calls recently while two data driven services with excellent reputations: Lowry’s and Ned Davis suggesting that a major top is not in place at this time. We can’t rule out a short term pullback as we’re always subject to that risk.
On a trading note, we are selling a portion our PFF which we bought in the Spring as an alternative to buying the common of the banks. The rebounding economy enhances the odds that the next major move for interest rates is higher and the PPF have no real maturity date, hence more volatile to a move higher in rates.
If you read reports about the smoke from the fires in LA are visible in Colorado, its not an exaggeration. Yesterday afternoon I noticed a haze surrounding the mountains near my home, a very eerie glow typical of fire smoke.
Be careful out there.