The Market Bounces Back, But Volume Remains Low and Stocks Still Remain Under Pressure
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Wednesday’s market action was filled with choppy price movements as Wall Street was trying to figure out if WM or LEH or both would go under that day. LEH and WM are about to be worthless as traders continue to hammer the stock and Wall Street firms back away from both. Bill Gross was on CNBC stating PIMCO still had LEH as a counterparty. This is far from the truth, more than likely his firm PIMCO has a few termed trades that were put on back in March. Technically, they are still a counterparty but he is hardly putting on new positions with LEH. Washington Mutual (WM) continues to deal with bad loans and to no surprise they are about to be wiped out. Yesterday’s action was merely an oversold bounce with volume coming in well below Tuesday’s level. Again, this market is very sick and will continue to slide.
Do not let the talking heads of CNBC or any other news outlet (remember these are journalislt) convince you its time to buy stocks. It is also important to remember those who are “professionals” on CNBC and other news outlets have motives that you may or may not know. Go with history, read Livermore and O’Neil, Boik, Darvas, Koteshwar, ETC and you will find that a time like this it is best to be on the sidelines in cash. Cash is king!
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