Blame the bear - Bear Stearns, that is. I would like to know how firms making so much money in the good times can fall so far from grace in the bad. Personally, I might sock away a few pennies in an insurance type of investment - like govies or cash - just in case. But no, good old fashioned greed got the best of them, as it always does.
What I thought was particularly bearish was the rejection of the morning news that said inflation was tame. Of course, if you eat or heat a house, as I have said for months, your view is a little different. Maybe people woke up to that and sold into the early morning rally.
At one point, the Dow was down 300. Within minutes it was down only double digits before the afternoon selling commenced. To me, this is all bearish action on good news. Toss in Bare Stearns (typo intended) and there was the excuse to head for the weekend flat (that's with no position, not the weekend apartment in London).
Fibonacci Phreaks, check out an intraday chart of the Dow - The morning snapback retraced exactly 78.6% of the day's decline!
And for the rest of us, here is a chart. That tall green candle from Tuesday has so far held the onslaught by providing support at its middle, which is more or less the bottom of the Janaury real bodies. Oh how critical is the close Friday! Too bad volume on many indices Friday exceeded that of the Tuesday rally.
If it walks like a bear and talks like a bear - IT'S A BEAR!
I don't have to be told twice. Do you?