Well, well, well...here we have God's greatest gift to the world, President Obama, now obsessed with further destruction of free markets, capitalism and personnel freedom. Here is a man who believes that every one's life in America should rise with the government and set with the government.
After last Tuesday's butt-kicking by Massachusetts voters toward the socialists, we see our most humble leader going on the attack. Banks...you are toast, Wall Street...get ready to tumble, mister rich person...cough it up...etc. And today he comes out with the government backed (taxpayers who still have jobs) plan to create more of them with silly gov't work projects. And don't forget adding insulation to your home; soon to create millions of caulking jobs and the like. But hey, winter is half over for much of the country.
Thank God with this latest defeat for the left, we can quietly torpedo government run health care and send it to the bottom with cap and trade and every other socialist bent program. Wake up Dumbo, you have had a year to get the economy stabilized and turned around. But it is looking more and more like you have failed magnificently. You silly bird...you focused on forcing your hard left Marxist agenda up our wazoos and not taking care of the slobs who you enticed to vote for your brand of Communism.
You managed to hoodwink the majority, but now your butt is in the fire and you don't like it. Working on midnight deals behind closed doors, promising certain groups that they will be exempt from your stupid taxes and all the rest of your slimy doings over the last year have graciously come back to haunt you and your Kommie Komrades. I have never witnessed such a bunch of deranged government leaders all collected in one place. You and your ilk are a disgrace to this great FREEDOM loving nation...so my advice to you is to take that slimy Pelosi and book fare to Cuba...where they will bow down and lick you bootprints.
AARG!!! Anyway, when trading/investing or fumbling around in any market, always remember to protect capital. Loss of capital means no trading. Or, get the book..."What I Learned Losing A Million Dollars" by Jim Paul and Brendan Moynihan and learn the most valuable lesson you ever can learn for increasing your wealth.
I have failed to fully learn this lesson as 3 of my option trades resulted in massive losses. This is because I failed to protect capital and limit my losses. I am still trading, but with limited resources. And with the third day of the Obama CRASH taking place, it looks like several of you are joining me. Currently I have a call option on PCLN (Priceline) which is the FEB 220 call. It is nearing the bailout phase as I write.
Markets hate uncertainty and with all the liberal word-sloshing this week, they have convinced me that they know not what they do. Since the current regime of sleazeballs in much of Washington is ANTI-Capitalist, it seems natural for them to destroy the markets and wealth in the process. Then they will expect all of us poorer people to come begging to them for a delicious handout and thus pledge our vote to support the hand that feeds us. What a crock of horse-manure, Mr Obama, you and your goofy hard-left pukewads. I will never, never, never bow down to your socialist crapple. Onward and upward FREEDOM and CAPITALISM!
Friday, January 22, 2010
Monday, December 28, 2009
An Update, 2010, And Beyond
Hey, this option trading using deep-in-the-money contracts really works well. There is little loss of option value due to time passing by and price movements reflect stock price movements with a high correlation. Of course, there is always the need to dump positions that are failing according to the direction you are trading.
The MOS (Mosaic) trade ended with a loss (about $350) as the option was nearing expiration. Then with two days remaining, the options I had purchased broke from losses into gains and my price target was hit exactly. But, again, I had sold the position due to non-action in the direction of my trade. This will happen to anyone who trades; as some positions will seem to take forever to move as expected. It is a good idea to set a limit for how long you want to hold a position before it starts to move in your favor, if ever.
As an example, while I had funds tied up in MOS, I had scouted out 2 very good trades in AAPL
(Apple) and AMZN (Amazon) that would have worked quite well. Today I exited the POT (Potash) call option trade with a small loss ($76) as it was too slow to evolve. I had been down over $500 on this position but according to my crystal ball it looked like it could reverse.
Meanwhile, with the funds from the MOS trade, I was able to buy a call on BIDU (Baidu, inc) and make a cool $960 overnight. Then, BIDU continued to trade higher and I missed out on another $700-800 in profits. Is that painful? No, because I cannot know how far any position will ultimately move. An 80% gain on a trade overnight is hard to ignore and not book profits. Since I only had 1 contract, it was either sell or risk losing good profits.
Now I am holding 2 X (US Steel) Jan 2010 $65 puts which today have become profitable. I may add to this position tomorrow if conditions look good to do so. I am expecting this stock to retreat from today's high of just over $58 to about $54-55, or with a strong market sell-off, to $49-50. Trading over the holidays can become skewed as volume and price movements lack fullness and authenticity. But trading is fun when things make sense using a prescribed method to place trades and take losses or profits. In about 3 months, my account has moved ahead about 250%. That is mainly a result of the fluctuations of a small account.
For 2010, I expect reality to come tumbling in and plow the bulls under at some point. I do not believe this is a new bull market because the Communists running the country from Washington will eventually over tax and spend us into financial depression. Just wait you Obama lovers, it will affect you numb-skulls too.
Beyond 2010, look out below. This time it is different. Capitalism and free markets are on the run as Marxists seek to destroy all evidence that the United States ever existed as a freedom loving country. And thus the markets will be deeply affected and not in a positive way. Forget listening to the mainstream pundits and economists as they are robotic and stagnant. The current market fluff parade will end in another bubble-popping episode courtesy of the gov and the fed.
As always, it is YOU and only YOU that can make it or break it in the trading game. Go your own way using accumulated knowledge and experience to guide you to greener pastures. Never give up. Forget CNBC, Bloomberg, Crammer, Barrons and all the rest. They do not know you, for only you can know you, inside and out; therefore you have all the power you need to become a multi-millionaire trader. The feast is yours to claim and enjoy.
The MOS (Mosaic) trade ended with a loss (about $350) as the option was nearing expiration. Then with two days remaining, the options I had purchased broke from losses into gains and my price target was hit exactly. But, again, I had sold the position due to non-action in the direction of my trade. This will happen to anyone who trades; as some positions will seem to take forever to move as expected. It is a good idea to set a limit for how long you want to hold a position before it starts to move in your favor, if ever.
As an example, while I had funds tied up in MOS, I had scouted out 2 very good trades in AAPL
(Apple) and AMZN (Amazon) that would have worked quite well. Today I exited the POT (Potash) call option trade with a small loss ($76) as it was too slow to evolve. I had been down over $500 on this position but according to my crystal ball it looked like it could reverse.
Meanwhile, with the funds from the MOS trade, I was able to buy a call on BIDU (Baidu, inc) and make a cool $960 overnight. Then, BIDU continued to trade higher and I missed out on another $700-800 in profits. Is that painful? No, because I cannot know how far any position will ultimately move. An 80% gain on a trade overnight is hard to ignore and not book profits. Since I only had 1 contract, it was either sell or risk losing good profits.
Now I am holding 2 X (US Steel) Jan 2010 $65 puts which today have become profitable. I may add to this position tomorrow if conditions look good to do so. I am expecting this stock to retreat from today's high of just over $58 to about $54-55, or with a strong market sell-off, to $49-50. Trading over the holidays can become skewed as volume and price movements lack fullness and authenticity. But trading is fun when things make sense using a prescribed method to place trades and take losses or profits. In about 3 months, my account has moved ahead about 250%. That is mainly a result of the fluctuations of a small account.
For 2010, I expect reality to come tumbling in and plow the bulls under at some point. I do not believe this is a new bull market because the Communists running the country from Washington will eventually over tax and spend us into financial depression. Just wait you Obama lovers, it will affect you numb-skulls too.
Beyond 2010, look out below. This time it is different. Capitalism and free markets are on the run as Marxists seek to destroy all evidence that the United States ever existed as a freedom loving country. And thus the markets will be deeply affected and not in a positive way. Forget listening to the mainstream pundits and economists as they are robotic and stagnant. The current market fluff parade will end in another bubble-popping episode courtesy of the gov and the fed.
As always, it is YOU and only YOU that can make it or break it in the trading game. Go your own way using accumulated knowledge and experience to guide you to greener pastures. Never give up. Forget CNBC, Bloomberg, Crammer, Barrons and all the rest. They do not know you, for only you can know you, inside and out; therefore you have all the power you need to become a multi-millionaire trader. The feast is yours to claim and enjoy.
Sunday, December 6, 2009
Trading Strategies
In this economic environment, it is difficult to know which end is up. The mainstream economists are virtually hailing the recovery and the advent of a new growth economy. In other words, we are heading back towards normal. Hardly, in my view. The trouble with most economists is that they all come from the same dithering school of nonsense. Their models are static and conventional and non-elastic. They view the present in terms of the past by using data that is averaged and non-adaptable...A+B=C, so that when they see A they automatically predict B and then assume C.
I think things ARE different this time, finally. Over the last 50-60 years, we have had several booms and busts but we have always recovered from the busts. However, the new variable is that debt has now become a major factor in the emergence of any recovery. All levels of debt have been skyrocketing over the last few decades. And increasing debt has the propensity to demand higher levels of income to service it. With the interest payments demanding more income, there is less available to use for saving, investing and spending.
You eventually get to the point where income does not cover the debt payments. The answer is not to borrow more, but to pay down more debt. Our economy, in the years ahead will be burdened by higher payments to service debt, higher taxes, and more regulations making it difficult to increase levels of business creation. And you tell me MR economist that we are heading toward a new sustainable growth economy? Hmmmm.
Anyway, the last OIH trade was sold for a $2.70 gain. Since then, the OIH has trended toward the downside. The newest trade has been to buy the DEC 70 put option on MOS (Mosaic). This trade has been a wild ride. The average cost is now $11.70, and the option over the last week ranged between $7.70 and $12.90. True, I possibly should have closed this trade for a loss, however, several of the indicators I watch were signaling a downside correction. At this point, I am at break even and expecting further downside which will increase the value of my position. Perhaps, my evaluation is faulty and I will sell for a loss which must be considered.
The bottom line is that short term trading is the way to go in this market. And to be successful requires using deep-in-the-money options if you are not trading stock. At least you can take advantage of any quick bursts in either direction as prices have been eager to stop and reverse in both directions. The upside momentum is waning as volume has been noticeably light for a rally of all mothers, so to say. And he silly bulls are always telling us that volume matters.
I think the next major direction will be to the downside because with an improving economy, MR Barnacle Ben will have to raise interest rates, thus making the service of outstanding debt even more costly. And if we fail to get a substantial recovery, the market will sink like a stone.
This is because high expectations are currently baked into the markets, and I think the political landscape will eventually preclude the formation of any robust recovery.
This means, do not blindly go into the markets expecting bullish action. Forces may squelch any significant upside from here. This country has gotten itself into a pickle of cucumberous (sic) proportions. This is the result of reckless unabated spending and money creation. Somewhere down the line, reality will catch up to the current dream world the government is stranded in.
I think things ARE different this time, finally. Over the last 50-60 years, we have had several booms and busts but we have always recovered from the busts. However, the new variable is that debt has now become a major factor in the emergence of any recovery. All levels of debt have been skyrocketing over the last few decades. And increasing debt has the propensity to demand higher levels of income to service it. With the interest payments demanding more income, there is less available to use for saving, investing and spending.
You eventually get to the point where income does not cover the debt payments. The answer is not to borrow more, but to pay down more debt. Our economy, in the years ahead will be burdened by higher payments to service debt, higher taxes, and more regulations making it difficult to increase levels of business creation. And you tell me MR economist that we are heading toward a new sustainable growth economy? Hmmmm.
Anyway, the last OIH trade was sold for a $2.70 gain. Since then, the OIH has trended toward the downside. The newest trade has been to buy the DEC 70 put option on MOS (Mosaic). This trade has been a wild ride. The average cost is now $11.70, and the option over the last week ranged between $7.70 and $12.90. True, I possibly should have closed this trade for a loss, however, several of the indicators I watch were signaling a downside correction. At this point, I am at break even and expecting further downside which will increase the value of my position. Perhaps, my evaluation is faulty and I will sell for a loss which must be considered.
The bottom line is that short term trading is the way to go in this market. And to be successful requires using deep-in-the-money options if you are not trading stock. At least you can take advantage of any quick bursts in either direction as prices have been eager to stop and reverse in both directions. The upside momentum is waning as volume has been noticeably light for a rally of all mothers, so to say. And he silly bulls are always telling us that volume matters.
I think the next major direction will be to the downside because with an improving economy, MR Barnacle Ben will have to raise interest rates, thus making the service of outstanding debt even more costly. And if we fail to get a substantial recovery, the market will sink like a stone.
This is because high expectations are currently baked into the markets, and I think the political landscape will eventually preclude the formation of any robust recovery.
This means, do not blindly go into the markets expecting bullish action. Forces may squelch any significant upside from here. This country has gotten itself into a pickle of cucumberous (sic) proportions. This is the result of reckless unabated spending and money creation. Somewhere down the line, reality will catch up to the current dream world the government is stranded in.
Saturday, November 21, 2009
This Is A Great Trading Market
In my last post, the OIH trade was stopped out for a slight gain. During the last week, I have traded puts on US steel, X, bought at $7.50 and sold for $9.65. And also calls on Mastercard, MA, bought for $9.90 and sold an hour later for $15.10. This was truly a fortunate trade.
I have now bought a call on the OIH, trading near $117, the DEC 105 Call, for $13.00. I think oil is forming a bull flag and as long as it holds $76, it has the possibility of breaking through resistance and moving to above $88. But with the dollar finding a footing in the market, it could rebound enough to send oil back toward $68-70.
By targeting short term gains of $2-4 per trade, it is possible to earn 10 points or more in a month. The goal is to earn approximately $1,000 per contract. Trade 10 contracts, and you have a real plan to earn over $100,000 a year.
This is not the time to be expecting the market to continue to move up to infinity. Quick, targeted and nimble trading is perfect in this environment. The economy is too flimsy to expect great GDP expansion going forward. The Wall Street crowd is pricing in 4-6% next year and that simply will not happen, other than perhaps for one quarter.
This country is very fragile economically right now, and yet we have the current socialist government doing everything opposite of what is needs to do. YES, Virginia, it is part of the master leftist devised plan to destroy America, its freedoms, liberty, capital and free markets.
Today will be a sad day if health care passes because it will start the government on its path to reshaping America into 1950-60 Russia. More on this later....
I have now bought a call on the OIH, trading near $117, the DEC 105 Call, for $13.00. I think oil is forming a bull flag and as long as it holds $76, it has the possibility of breaking through resistance and moving to above $88. But with the dollar finding a footing in the market, it could rebound enough to send oil back toward $68-70.
By targeting short term gains of $2-4 per trade, it is possible to earn 10 points or more in a month. The goal is to earn approximately $1,000 per contract. Trade 10 contracts, and you have a real plan to earn over $100,000 a year.
This is not the time to be expecting the market to continue to move up to infinity. Quick, targeted and nimble trading is perfect in this environment. The economy is too flimsy to expect great GDP expansion going forward. The Wall Street crowd is pricing in 4-6% next year and that simply will not happen, other than perhaps for one quarter.
This country is very fragile economically right now, and yet we have the current socialist government doing everything opposite of what is needs to do. YES, Virginia, it is part of the master leftist devised plan to destroy America, its freedoms, liberty, capital and free markets.
Today will be a sad day if health care passes because it will start the government on its path to reshaping America into 1950-60 Russia. More on this later....
Monday, November 9, 2009
Market May Rally Into 2010
The markets are surging today and nearing taking out the previous highs of a few weeks ago. Specifically, I am long the OIH with the DEC09 110 call option purchased on 11/9 for $12.25. Based on the real possibility of oil trading above $90 a barrel relatively soon, this position should move smartly higher. The next hurdle is taking out the previous high of $132. Then the next target is $142, which is the 50% re-tracement level between the high of 222 and the low of 61. If oil can surpass $90, then a move to this level is warranted.
Buy a deep-in-the-money DEC or JAN call options on the OIH on any pullback below $123. Still, time will tell, but I believe this is a false rally and that in early 2010 we will have a significant sell-off to reflect reality of a recovery going bad.
Buy a deep-in-the-money DEC or JAN call options on the OIH on any pullback below $123. Still, time will tell, but I believe this is a false rally and that in early 2010 we will have a significant sell-off to reflect reality of a recovery going bad.
Saturday, September 26, 2009
False Recovery = False Markets 10/30/09
The S&P 500 tested 1100 a few weeks ago. The low this year was about 667, which means it has advanced about 64%. If you caught a good chunk of that move, it means you have earned, on paper anyway, about 3 to 4 years worth of average returns in about 7 months. Is it time to think about selling or at least scaling out of your positions? YES!!
I know, there are too many of you who are glued to the media speak about the new recovery and subsequent bull market to even think about jumping ship just as the "move" is gaining strength. It is only natural for most investors/traders to be virtually permanently bullish, but the new normal economy is anything like the old.
Witness the current industrial capacity usage of under 70%; which means there will be little expansion any time soon. Also note that the current socialist administration is intent upon destroying jobs by creating new taxes on small businesses, the very engine of consistent job growth in the past. Will green jobs take up the slack? Not unless you can get a job mowing Al Gore's estate or cleaning his multi-thousand square foot energy guzzling mansion.
Consider that we will need to create about 15 million new jobs in the next 5 years just to get back to 5-6% unemployment which means about 250,000 new jobs must be created every month, on average. It ain't gonna happen. At least not with this dummy administration that would likely have a hard time making profits peeling potatoes for McDonalds.
Other factors include rising energy prices, less credit, fewer consumers using credit, no mortgage equity loans, less overall demand for end products, big questions on the future of taxes and government interventions, global demand sluggish at best, massive government debts which will suck up credit to pay interest upon, an overheated market, baby boomers needing to save more and spend less over the next decade, and the list goes on....
I am short BIDU at $397, with the DEC 350 put (BPJXJ) at 8.70. I know this is a stock that the bulls love to love because it is going to $1,000....but with the recent downdraft from about $440 to $353, it has retraced 50% back to $400. I believe it will fall back to at least retest the $375 area. This will be a short term trade. Too many bulls make for juicy profits trading counter-trend, as most people in this stock have no clue about why they are. They are just following everyone else...which is a prescription for disaster.
Witness today's market action verses yesterday's false rally based on the government jacked-up GDP numbers. There is little sustained growth in the economy as more government stimulus will end up causing ever greater reductions in growth. A government dollar put into the capitalist free economy is really costing about $1.30 (including interest) and resulting in about a 40-50 cent return into the economy. The government has never and never will create lasting economic benefits since its purpose is to tax to the max and redistribute an ever-shrinking pie of over-stated wealth.
We still could test the March 2009 lows and go lower still...say to about 550-575 on the S&P 500; that is of course if we do not sink into a protracted depression based on and over-indebted economy (consumer, business and government). Sorry, but the current green-shoot nonsense is just that. We are still very much in a pickle of monstrous dillarity.
The way out into the new prosperity will be a long road of mish-and-mash or perhaps a super-quick avalanche which clears the decks. However we go, there will be prolonged pain and remorse in the financial system despite all the crackhead talk from Obama and his cast of a thousand czars. Debt built up over 5 or 6 decades must be reconciled and refined. Blessed are the cash rich citizens, even though the value of that cash sinks every day.
As an add on, the BIDU Dec 350 put was sold today at 14.00. After commissions, this resulted in a $504 profit. My first sell target was the $375 area, and indeed BIDU traded just below $377. It was difficult to pass up this type of hurried gain knowing that this stock can easily move 10-20 points in a day.
Thus far, just after 2PM, the markets have surrendered all of Thursday's fake gains. We may get a fairly strong swosh to the down side by the close, or perhaps a solid down-blast on Monday morning that may set up a nice counter-trend upside trade. I think we could get down to at least 950 on the S&P in a week or two or three.
OIH looks good to buy for call options if it gets down between $111-113, for a relatively quick reversal up into the $115-117 area. And there will be other options to be bought in both directions, keeping a weathered eye on price movement and a decisive trigger finger on the buy/sell button. Quick hits will work well in an undetermined market in which the bulls have been gored and the bears are looking to put a contract out on the upside momentum.
I know, there are too many of you who are glued to the media speak about the new recovery and subsequent bull market to even think about jumping ship just as the "move" is gaining strength. It is only natural for most investors/traders to be virtually permanently bullish, but the new normal economy is anything like the old.
Witness the current industrial capacity usage of under 70%; which means there will be little expansion any time soon. Also note that the current socialist administration is intent upon destroying jobs by creating new taxes on small businesses, the very engine of consistent job growth in the past. Will green jobs take up the slack? Not unless you can get a job mowing Al Gore's estate or cleaning his multi-thousand square foot energy guzzling mansion.
Consider that we will need to create about 15 million new jobs in the next 5 years just to get back to 5-6% unemployment which means about 250,000 new jobs must be created every month, on average. It ain't gonna happen. At least not with this dummy administration that would likely have a hard time making profits peeling potatoes for McDonalds.
Other factors include rising energy prices, less credit, fewer consumers using credit, no mortgage equity loans, less overall demand for end products, big questions on the future of taxes and government interventions, global demand sluggish at best, massive government debts which will suck up credit to pay interest upon, an overheated market, baby boomers needing to save more and spend less over the next decade, and the list goes on....
I am short BIDU at $397, with the DEC 350 put (BPJXJ) at 8.70. I know this is a stock that the bulls love to love because it is going to $1,000....but with the recent downdraft from about $440 to $353, it has retraced 50% back to $400. I believe it will fall back to at least retest the $375 area. This will be a short term trade. Too many bulls make for juicy profits trading counter-trend, as most people in this stock have no clue about why they are. They are just following everyone else...which is a prescription for disaster.
Witness today's market action verses yesterday's false rally based on the government jacked-up GDP numbers. There is little sustained growth in the economy as more government stimulus will end up causing ever greater reductions in growth. A government dollar put into the capitalist free economy is really costing about $1.30 (including interest) and resulting in about a 40-50 cent return into the economy. The government has never and never will create lasting economic benefits since its purpose is to tax to the max and redistribute an ever-shrinking pie of over-stated wealth.
We still could test the March 2009 lows and go lower still...say to about 550-575 on the S&P 500; that is of course if we do not sink into a protracted depression based on and over-indebted economy (consumer, business and government). Sorry, but the current green-shoot nonsense is just that. We are still very much in a pickle of monstrous dillarity.
The way out into the new prosperity will be a long road of mish-and-mash or perhaps a super-quick avalanche which clears the decks. However we go, there will be prolonged pain and remorse in the financial system despite all the crackhead talk from Obama and his cast of a thousand czars. Debt built up over 5 or 6 decades must be reconciled and refined. Blessed are the cash rich citizens, even though the value of that cash sinks every day.
As an add on, the BIDU Dec 350 put was sold today at 14.00. After commissions, this resulted in a $504 profit. My first sell target was the $375 area, and indeed BIDU traded just below $377. It was difficult to pass up this type of hurried gain knowing that this stock can easily move 10-20 points in a day.
Thus far, just after 2PM, the markets have surrendered all of Thursday's fake gains. We may get a fairly strong swosh to the down side by the close, or perhaps a solid down-blast on Monday morning that may set up a nice counter-trend upside trade. I think we could get down to at least 950 on the S&P in a week or two or three.
OIH looks good to buy for call options if it gets down between $111-113, for a relatively quick reversal up into the $115-117 area. And there will be other options to be bought in both directions, keeping a weathered eye on price movement and a decisive trigger finger on the buy/sell button. Quick hits will work well in an undetermined market in which the bulls have been gored and the bears are looking to put a contract out on the upside momentum.
Tuesday, August 11, 2009
Is This Rally For Real?
OK, the markets have rallied over 50% from the March lows. As usual, the market is somewhat ahead of the economy. For me to believe that we can go higher based on an economic turnaround that has either begun or will begin shortly, I want to see this happening:
The true jobless rate is likely between 13-15%. How will the economy grow in the future with housing still in the muck, businesses not expanding, taxes rising, energy costs ratcheting higher and health care sucking more earnings from households? And if the government gets hold of the health care system, expect to pay through the nose to support potential Obama voters in the form of immigrants that will get FREE care, anytime, anywhere. In other words, where do we see jobs being created that will lift the economy and cause people to spend more, even though they will have fewer dollars to spend?
It would be sweet to think that the downturn will or has reversed course and that all will be well next year. This time, I believe things are different. China is still struggling to make an economic revival. Europe is still falling and has not found bottom. Russia is reeling with energy issues and banking problems, more severe than most of ours. So, dear friend, the world economy will not be so accommodating as to bail the US out anytime soon.
There are too many factors working against a economic revival, sad to say, and perhaps this will lead to a doomed recovery that will materialize as a rather bumpy and inconsistent morass. The consumers of America have it right; get out of debt or pay it down, save more income and cut extra-ordinary and non critical spending. Unlike the government, the consumer is doing it right, even though It is the consumer who mainly propels the economic engine. Government on the other hand is pumping up the deficits and spending like there is no tomorrow. Somewhere, something has got to give.
As far as trading goes, I think we could be heading for a severe correction, as yet unforeseen by the mainstream pundits that will last for several months. Mid August to the end of November, to be specific. I think the news will not be to the liking of the markets, and as we drill down to what is really happening, the economy still stinks, like an unwashed commie liberal socialist Obama lover. Any way, this rally will lose steam as the news becomes less favorable to a recovery until well into next year, if at all. Take it a day at a time and enjoy your world.
The true jobless rate is likely between 13-15%. How will the economy grow in the future with housing still in the muck, businesses not expanding, taxes rising, energy costs ratcheting higher and health care sucking more earnings from households? And if the government gets hold of the health care system, expect to pay through the nose to support potential Obama voters in the form of immigrants that will get FREE care, anytime, anywhere. In other words, where do we see jobs being created that will lift the economy and cause people to spend more, even though they will have fewer dollars to spend?
It would be sweet to think that the downturn will or has reversed course and that all will be well next year. This time, I believe things are different. China is still struggling to make an economic revival. Europe is still falling and has not found bottom. Russia is reeling with energy issues and banking problems, more severe than most of ours. So, dear friend, the world economy will not be so accommodating as to bail the US out anytime soon.
There are too many factors working against a economic revival, sad to say, and perhaps this will lead to a doomed recovery that will materialize as a rather bumpy and inconsistent morass. The consumers of America have it right; get out of debt or pay it down, save more income and cut extra-ordinary and non critical spending. Unlike the government, the consumer is doing it right, even though It is the consumer who mainly propels the economic engine. Government on the other hand is pumping up the deficits and spending like there is no tomorrow. Somewhere, something has got to give.
As far as trading goes, I think we could be heading for a severe correction, as yet unforeseen by the mainstream pundits that will last for several months. Mid August to the end of November, to be specific. I think the news will not be to the liking of the markets, and as we drill down to what is really happening, the economy still stinks, like an unwashed commie liberal socialist Obama lover. Any way, this rally will lose steam as the news becomes less favorable to a recovery until well into next year, if at all. Take it a day at a time and enjoy your world.
Subscribe to:
Posts (Atom)