20Sep3:09 pmEST

No One is Coming to Save You

China may very well wind up bailing out Evergrande in some way, shape, or form (the offshore players could get the wrong end of the stick, so to speak, for example), but it may be from much lower price levels from here in markets. 

I am fully aware that The Fed since, basically, the Greenspan era has spawned a generation of market players who always expect the inevitable bailout to come. That sort of Pavlovian response has been ingrained into the psyche of all of us, even those who rail against the moral hazard and unintended consequences of such policy decisions. 

For our purposes, we always want to guard against drifting too far away from a disciplined trading style since, after all, that is what keeps us in the game over the long run while many speculators financially fall by the wayside. Thus, we would be wise to not rely too heavily, at least not yet after merely one day of Evergrande finally become a global headline, on an imminent bailout. 

As for fresh ideas, keep an eye out for "catch down" plays like OKTA and ZS in software. Both are extremely rich in terms of valuations, and could finally stage an overdue correction. The IGV software ETF, below on the daily chart, is breaking a five-month trend-line today fairly decisively, to boot. 

In the Evergrande Scheme of ... Stock Market Recap 09/20/21 ...

 
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