As I said in a couple of my recent posts... We had a Bear Market rally. You can trade Bear rallies, just don't buy it and marry it. But how do you know a Bear Market rally from a new Bull Market? You don't, but this market was not a difficult call. I don't give specific advice, but I can give you some general stuff to look for when trading... If the market is up 8 out of 10 days, and you were not in it this is not the time to get in. There is an old expression: "If you did not get invited to the wedding don't go to the funeral". Profound, no? I look for "short" opportunities after 8/10 up days... but don't short if you don't have the discipline to cover quickly.
Conversely, when markets are down 8, 9, 10 days in a row (or 8 out of 9 days, you get the ides) that kind of oversold can be worth a long trade. This is ESPECIALLY true in commodity markets, because unlike individual stocks Oil or Gold or Corn CANNOT go to ZERO.
Right now we are in no man's land. Tomorrow the government could do something outrageous and squeeze a shorts head right off, a la Volkswagen, so go research how bad that one got for the shorts before you go and short anything (when you are long, provided you don't leverage, you cannot lose more than 100%; that is not true when shorting). And things have not gotten ugly enough to go long.
Patience. The moment will come.
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Oil inventories were nothing but bearish. Bearish for Oil, bearish for stocks, bearish for the economy, bearish for inflation... there was a lot of Bear sh-t to go around. The decline in investment into productive capacity WILL overwhelm the decline in demand at some point in the future - but not yet. Hold your powder. When things are making you sick and start to believe the world really is going to come to an end... THAT IS WHEN you buy oil futures. I believe that this spring might look a lot like that. Don't stand in front of freight trains. Its really, really unhealthy. Worse than cigarettes.
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Here we find an analyst with a marvelous gift for the understatement:
Got that? (You really should read the article in its entirety).
Under no circumstance will unemployment be held at 8% or less. I got a better chance of waking up tomorrow with black hair (you've heard of salt & pepper? All I got left is salt). 9%? No chance there, either. 10% is a minimum, 12% the most likely, and 15% is NOT out of the question.
Housing, banking, and equities have gale force winds in their face.
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Pensions are more than underwater. They will never make it back to shore. This includes pensions for municipal workers.
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The rate of change in the American, and world, economy is nothing short of breathtaking. If you are an investor/savor, business owner, or support a family, there is not a day where you can take your eye off the ball. There will be a lot of spin, spin, spin out there, but tune in for a no BS assessment from yours truly. Not that we will always be correct - we won't. But we actually do think about this all day, every day. Clearly, few of the folks in front of the microphones can claim as much.
Stay tuned.
Mentatt (at) yahoo (d0t) com
P.S. I am a bit behind on my email... Our daughter is 3 weeks old, and with 2 kids in diapers, some things just are not getting done. Bear with me.
1 comment:
Layoffs are now in progress in the US domestic oil service companies.
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