Kinda makes LEH’s expiration-day short-squeeze (man that is a textbook graph of a short squeeze) from 42 to 50 look just a wee bit suspicious. And you know I’m not a suspicious person *cough*.
I’ll say it again, these multi-percent moves up and down every other day are NOT the sign of a market that is instantly digesting and completely and efficiently reacting to every technical and new fundamental disclosure. They are a sign of overcorrection, or wild movement for no reason whatsoever. The wheels are coming off the cart.
I think a lot of people have figured out that the Friday miracle rallies are just attempts to shake us out of our short positions at the worst possible time. A lot can happen in two, or in this case, three, days, and you gotta bet that the stuff that happens is gonna be bad instead of good.
That said, I wonder if Monday “They” will do the old “panic gap down is the low of the day” as is their usual practice. Screw ‘em. I’m fully re-loaded with QID’s at 52.80, in the red for the moment but far below my previous sale, and I’m holding.
Let's see. Lehman was driven down by the incorrect fear that it was the next Bear Stearns. Then it came out with a good earnings report, the Fed did a nice rate cut, and Fannie Mae and Freddie had part of their excess capital restrictions lifted. All good news for Lehman when some people thought it would be their darkest hour. It's all explainable, not a miracle.