Q4 began yesterday. Wednesday’s rally had no impact on our current out look. We have not apparently reached that inflexion point where prices are simply to cheap for investors to pass up. Historically that would indicate that we have more work to do on the downside. As I suggested earlier in the week, closing the door on the 3rd quarter was this week’s priority. That alone, given the wreckage that portfolios suffered in the period, was nearly all investors were up to. Thursday’s intraday trade reflects that.
There is a degree of portfolio induced PTSD in the market place. The violent upheaval that caught many investors off balance in Q3 will take time to overcome. And frankly, there is no indication that our trade lower has come to an end. I would argue we are actually setting up for an exhaustion selloff in Q4 at which point prices will likely be entirely too cheap for investors to pass on. That trade, if it materializes will trigger a cycle of buying into year end that may well manage to cut our year-to-date loses in half, maybe better.