I bet you thought i had the answer for ya.. I do not. Though i can say the general thesis over on my side of the table, "all the king's men cannot put humpty dumpty back together again", IS bearish. The magic hand cannot keep this market from falling, think "House of Morgan", eventually the market will overtake the PPT (plunge protection team) no matter what the circumstances.The price action we saw today (Thursday February 4, 2010) confirmed the street is indeed selling, which is NOT the standard tip toeing around whacking a few bids then reverse/retrace. Commodities, energy, tech and financials all fell today with vigor! Days like today give me chills, the feeling is so familiar. Accelerated selling out of nowhere is a product of retail, mutual funds and hedgies exiting the casino. The roulette ball has spun, settled and the inside numbers are about to be cleared. You lose. The only player who won sold 100 S&P handles ago, the rest of the players are left watching their chips swept into the black hole next to the dealer. Folks, this market will steal your money, if you are wise you will not be robbed.
Pay attention to the signals the market is giving us, the single biggest signal i received was the market's reaction to our President's recent ideas of "regulation and reform". DAMN YOU FAT CATS!! pshh ... The fat cats put you in office, you think middle class money really put you and your pals into office? Hell no, wealth ORIGINALLY generated via Wall street did.
The history of our markets show us politics trump hard economic numbers and fundamentals... if economic numbers and fundamentals are horrible, threats of capital market regulation and reform are only going to constrict a already gasping market. Who wants to be long when you have no idea what our federal government has up its sleeve (or even knows what the hell is going on), and is itching to F$% everything up just to say they did "something"?
What i want you to take away from this post is, take a look at the charts, listen to the signals, interpret the signals correctly, manage risk. Flatten out, remove risk, take profits before the PPT is overpowered and the bottom falls out overnight. I am not saying get short by any means, i believe the safest strategy for people who have recouped much of their losses the last year is preserve, hibernate until the turbulence passes. Hedge Accordingly
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