Commodities Bloodbath Except Gold, Silver, Crude; Nasdaq Off 2.7%, SP 400 Off 2%; VIX Shows Little Fear; Will this be the Dip that Won't be Bought?

By: Mike Shedlock | Tue, Feb 22, 2011
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Commodities and equities are taking a steep dive today with the turmoil in Libya.

Please see Libya's Deputy Ambassador Calls for "No-Fly Zone Over Libya"; Crude, Gold, Silver Futures Spike, Equities Hit; Oil Companies Prepare Exit for more details on Libya.

Gold and silver are in the green but well off the highs. Energy is struggling to hold on to its gains. Here are a few screen snapshots.

Grains
Grains

Metals
Metals

Energy
Energies

Financials
Financials

Indices
Indices

Items of Note

Big Reversal Day or Another Dip to be Bought?

The one big question on nearly everyone's mind is: "Should I buy the dip tomorrow or should I wait for two days?"

Indeed dip-buying is so firmly entrenched many dip-buyers are probably loading up today.

I do not know if this is just another dip to be bought or the start of a major trend reversal. However, no one else knows either.

What I do know is history suggests it is not prudent to be in this market without significant hedges. Optimism in general and earnings expectations in particular are at insane levels, and PEs are priced well beyond perfection.

I presented the bearish case for equities in Negative Annualized Stock Market Returns for the Next 10 Years or Longer? It's Far More Likely Than You Think

If you haven't read it, please do. If you have read it, you may wish to give it a second look.

 


 

Mike Shedlock

Author: Mike Shedlock

Mike Shedlock / Mish
Mish Talk

Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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