What I Can’t Know

Derek Hernquist

In my younger days, I may have been ready to attack a day like today.  Over the years, I've grown content to let others battle for support and resistance, and just choose the winning side as the evidence builds.  I have ZERO edge on Dubai. If rumors about this had caused a few days of weakness already, sure it might be buyable. But this is a curve ball straight from the highs...no way for me to play it other than holding the defensives I've been buying, and stopping out if they fail.

I do know it appears to be a shock to the markets, and I do know we haven't budged since that shock started spreading 24 hours ago. Whether it has impact beyond today I have no idea, but I view the period between 10 AM today and the middle of next week as a great time to observe the markets' underpinnings.

The broader market has diverged from the indices for weeks, without causing trouble.  The next few days should tell us quite a bit about the eventual resolution of this split, and I plan to use my resources to study rather than plunge.  It may be the butterfly's wings that shake global risk-taking, or a gnat on the arse of global capital.  What I do know is I CAN'T KNOW right now.


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