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More dead cat than other.

The market is selling on fear and the increasing knowledge by more people that we are screwed (the economic fundamentals are simply terrible going forward 12-60 months). But these people are still brainwashed to “buy the dips”. The markets have gone down hard this year and very hard the past 3 weeks. People simply EXPECT a rally and at some point it becomes a self-fulfilling prophesy.

I was tempted to get in myself because it has become crystal clear a rally had to occur at some point, but this market is so screwy, I just didn’t have the nerve to commit to going long. I could easily the markets on a long, slow slide to 550 and I just didn’t want to get caught in that potential slide.

Rallys like this are caused by professional investors thinking “oh come on, it can’t keep going down like this. It just can’t. It has to turn around sometime, even if only for an intermediate rally.”

Call this self-fulfilling prophesy. I have no clue how high we go but I’ll be surprised if we see 800 on the S&P. I’m sure I’ll be corrected by the pros who are predicting that we retrace 1/2 our losses. I can’t see it.

The parade of bad news will keep coming and a rally will not be sustainable. Fear will return.

I thought it was key today when Meredith Whitney was talking to Maria Fartaroma saying “Citi’s operating profit in the first 2 quarters, didn’t count writedowns”. OK, so I got a $500 a month raise, but that didn’t count that my taxes went up $1,000 a month. Same difference. But hey, I’m EARNING so much more now!!

People are looking for an excuse to be hopeful. Some very quick traders will make a nice killing in this rally. Most pros and all amateurs will get slaughtered going long.

Oh well... Here kitty, kitty.