Well this is no surprise.
Back on April 15th, in our Live Chat Room, I said to our Members:
"What we really care about is the bigger picture and we know 2,850 is our old Must Hold and 2,300 (2,280) is our -20% line and 2,550 (2,565) is our -10% line and that's the range we expect to be in.
Once things calm down, we should range up or down 10% around 2,850 for the 2nd half of the year but I think for the next few months, it's more likely we stay between 2,550 and 2,850 and consolidation there would be nice and healthy for a good move back to the top of the range that's more likely to stick."
We expected the top of the range to be a barrier and we lightned up on our longs and added more hedges at the top and, since then, we're pretty much right where we were at the time but this morning we're down yet again on the Futures, down 5% in the last 3 sessions as the Adminstrations "Blame China for Everything" strategy is not really inspiring investor confidence.
Warren Buffett isn't buying this dip and that's kind of disturbing. My long-time readers know how much I love Buffett but I don't always agree with hm these days as he's losing a few steps from what he was so, just because he says something doesn't mean it's true – as evidenced by his sudden love of airlines, now ended as he dumped them all – since he's not confident that industry will recover from the virus any time soon (and "soon" to Warren Buffett is years, not months!).
Buffett said his $137Bn cash on hand "isn't that huge when you think about worst-case possibilities… We don't prepare ourselves for a single problem, we prepare ourselves for problems that sometimes create their own momentum." You can understand why Buffett is upset – Berkshire Hathaway (BRK.B) is down 20% at the moment and probably headed back to down 30% after reporting…
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