sideways2 Looks like today we gave back all of yesterday’s gains and then some. We do that a lot. One could also say we are going sideways and probably will keep going in that direction until there is a little more clarity regarding when this mess is FINALLY GOING TO BE OVER. (I’m reminded of Kenan Thompson as Oscar Rogers on SNL in his “Fix it” skit).

We’re essentially bumbling around at the bottom, rallying violently on every scrap of news that give us hope, but then inevitably sell off again in the constant onslaught of bad news. Every day we are facing more job losses, dismal earnings, Meredith Whitney’s latest bank bash, and much, much more.

Sometimes we rally in spite of bad news. Sometimes we don’t. Sometimes we completely overreact to information that has been out there for at least three months already, and should have been more than discussed to death. Though it never seems to fail to surprise in a bad way.

Tomorrow we’ll get the latest GDP number for Q4 2008. Looking at the 50 % haircut the markets have already “experienced”, a pretty bad number should be more than priced in. But yet, I’m sure once we see the -5 % (or worse ) reading on our screens tomorrow the markets will freak, as if they could not possibly have seen that one coming.

But even that selloff won’t matter. Losing 10 % in three days is irrelevant because you can all get it back three days later. All the current bad news is priced in and won’t move the markets in any direction. To go significantly lower we need events that are significantly worse than what the market already expects. I don’t even want to speculate what that may be. And to go significantly higher we either need a) unexpected good news (as in “housing is bottoming”) or b) an absence of bad news. I think we will see b) before a). But even b) is not really near. So I guess we’ll just keep on grinding sideways.

In other news: I do enjoy Twitter. I was lucky that pretty much all my market calls so far worked out, but then again, I was quite general with some of them. I shall twitter more in the future.