Tuesday, August 28, 2007

Market Recap

It was quite a day today. Close to a 300 point drop on the Dow with even bigger percentage drops on the Nasdaq and S&P 500. Volume was on the light side though thats expected around this time of the year. The question is where do we go from here ? A pullback was needed to consolidate last weeks gains and that is what we are getting. A retest of Dow 12,500 may be in order or perhaps a test of the 200 day moving average of 12,880 . Whatever the case, I believe the markets capitulation last Thursday and subsequent recevery was indeed the market bottom. Whether I am correct remains to be seen. Within my fund I am positioned almost 30% in cash. As mentioned I had sold 90% of my bull ETFs QLD SSO DDM MVV UWM last week. I reduced a few equity postions Monday and I feel comfortable whatever happens apart from perhaps a 50% drop in the market.

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