MARKET COMMENT
February 27, 2007
Complacency is the prime killer for most investors.
The longer things continue to go your way
conventional risks become ignored until “bam” you’re taken by surprise.
I can’t count the number of times we’ve posted various
Emerging Market charts with warnings about the potential for rapid and serious
corrections such as witnessed last summer.
If you’re looking for some intelligent guidance there isn’t any
available from any source on the Street today.
Today was a train wreck.
The aforementioned is pretty much the picture
everywhere.
On a day of heavy selling
like today, the selling becomes indiscriminant and things that shouldn’t go
down much get tossed carelessly.
Precious
metals are a case in point.
The dollar
was weak, crude oil was a little higher but gold and silver get tossed.
Why?
Because when selling begins investors look around and sell positions
where they have profits to offset perceived or real losses elsewhere.
It’s a “get me out” mentality.
You have to wonder about the clumsy and immature way Chinese
authorities have handled their market comments and policy decisions.
First just a few short weeks ago they
indicated a desire to slow things down and stopped the issuance of new
shares.
That must have offended someone
high up since they changed their minds in one week.
Now they put a hammer on markets driving them
down 10% by restricting lending for stock purchases.
They don’t have the finesse yet and may just
squander any credibility for awhile.
There’s not much we can say to make markets appear better than
they are.
Perhaps the Fed will start
launching the helicopters to print more money to reinvigorate things.
This may be a one day wonder, but expect more
follow-thru selling tomorrow morning at least.
Then we’ll have to see if markets can just move sideways for
awhile.
That would be the best thing
that could happen.
Normally I’d sign off with, “have a pleasant evening”.
But that seems out of place today.
Disclaimer:
Among
other issues, the ETF Digest maintains positions in:
ILF, EEM, QQQQ, SPY, MDY, IWM, EWM, GLD, SLV,
DBP, DBE and GDX.