As I begin to roll out The Daily Battle Plan 2.0, today is a good opportunity to show you what’s coming.
The first (and most important part) is the Daily Analysis piece. Let’s go there first.
With the quarter now done and the major averages losing double digits over the past three months, there were few if any safe havens besides being long Treasuries. Most equity funds (both long and long/short) lost money. The metal funds lost lots of money (in spite of the fact that the fund managers insisted prices couldn’t possibly go lower), energy funds were in the same boat, and those who were long Europe – well they’ll remember the quarter for many years.
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Also, the past two weeks saw assets being sold for dollars across all markets. The European search for liquidity (meaning U.S. dollars) took down asset classes that had little to do with economic conditions. Just like in 2008 when the U.S. was crunched for cash, the same scenario is being played out again; this time coming from Europe.
When this will end I do not know. I’ll leave the guessing to others. I’m glad we have high cash levels and have seen trades on the short side, especially in September. And many of you who are long have hedges in place successfully preserving your capital.
Pessimism is at extremes today and VXX trading above 40 for over a month is not normal. Either the financial system is going to collapse, or we’re going to look back at this time and say this was one of the better opportunities of the decade.
The above is from Larry Connors’ Daily Battle Plan.
To learn more about the Daily Battle Plan, click here for more information.
Larry Connors is founder of TradingMarkets.com