Who says you can raise taxes on depositors? Apparently, Cyprus can. This raises many questions. However, U.S. markets didn’t seem to mind too much as the problem was viewed to be contained to Russia and Europe. I guess we are considered a safe haven after all. This development, by the way, adds another point to the bull’s case as more foreign money from Europe should now flow to the U.S. looking for safety. Anyway, I went heavy into cash last Friday on short-term valuation concerns. I added to UPRO and NOV on the open today, down 100 points, to be prudent and buy the dips. Let’s keep the rest of our powder dry, though, in case we decide to find more reasons to sell Tuesday. Update: Markets finished flat. S&P 500 approaching 20.
This is an update 3 days later btw. The sell-off has indeed seen some follow through since the Cyprus debacle. The S&P 500 is now getting closer to the 20 day moving average. Would not pile in all at once here to go long as stocks have had a big run, but stocks are good for a short term trade at this level. (We should see a bounce off of the 20 day tomorrow.)