Marketview: Safety Trade And Econopocalypse Stylish Again, AEP, SO, ETR, FCX, MS, BAC

• Posted by DynamicHedge
• on September 24th, 2011

We’re witnessing the most difficult market for the most amount of participants in years.  Spread traders, credit traders, macro guys, long-only funds, commodity traders: everyone is getting caught in the crosscurrents.  I thought we would see an announcement of some sort last week that would buoy the market up to the 1260 area.  Instead, we made it to 1210-1220 region, sputtered and gapped lower.

The bears are firmly in control of the market once again.  The same tired caveat must be made that global policy makers can strike at any moment, attempting to destroy the plans of those betting against the system.  In fact, the market only held up in Friday’s session by widespread paranoia about  intervention over the weekend. The constant threat of monetary intervention is getting exhausting.  If global policy makers want to choke off this bear they’ll have to concoct an insane plan to counteract the events unfolding in Europe — and fast.  What the market really needs is a good dose of unobstructed price discovery.

I’ve never seen market sentiment this bleak.  Everyone I talk to is negative on equities and worried about the economy.  This is not run of the mill yo-yo sentiment — this is deep pessimism.  At least it means we’re getting closer to resolution.  Once the dust settles this will be an amazing opportunity.

Winners: $AEP, $SO, $ETR, $BMY, $ABT, $HNZ, $PEP, $NKE

Losers: $FCX, $HAL, $NOV, $DVN, $MET, $MS, $BAC, $JPM

The safety trade was back on with utilities, healthcare, and consumer stocks holding up well against the selloff.  Everything in basic materials, financials, industrials, and precious metals went into free fall mode.  Investors are seeking cover.  I’ve been bearish since Rick Ross called this bear market back on August 3rd and I think we trade lower still.

Winners:

Losers:

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