It's the last day of the month and it's all to play for. Macro Man's monthly P/L is still negative, but only just. It won't take much at all for him to sneak in another positive month (albeit a less impressive one than it looked a week or so ago.)
Typically, the small mammal that powers Macro Man's IT systems appears to have caught a terminal disease, so he appears set to spend much of his morning battling his computer.
Suffice to say, however, that the DOTW are having their say...for the time being. While it's easy to say ex-post, the risk asset market did look set up for a bounce yesterday, and duly delivered. When even Chicken Little Asset Management ("where the sky is always falling") thinks we're oversold, you know it's time for a bounce.
However, the 3 wave correction set up that Macro Man sketched out in February/March applies here as well, in all likelihood. The hedge fund community is even experiencing the same sort of drawdowns, if the relevant indices are to be believed. There remains ample potential for a further bounce up to 1500-1510 on the SPX before further weakness ensues. Such a squeeze will no doubt feel very painful indeed for risky asset shorts and could well suck the DOTW into re-adding risk at lousy levels.
If Wave C delivers the sort of bone-crunching drawdown that it failed to in March, the DOTW may be left singing a different Smiths tune in desperation :
Please please please let me let me let me get what I want this time
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