We are at the go higher or trend lower point in the market. After a 35-40% move from the bottom, perhaps this bear market spike has run out of steam. There is little question that many stocks are well ahead of their next 6 month fundamentals. And since we have basically relied on the consumer to drive the economy and therefore the markets, many new roadblocks to returning to the good old days are about to make there presence felt.
Witness the new economy and the new consumer situation moving from 2009 into 2010 and beyond. These themes are going to hamper positive growth in the economy and thus stall the markets for quite a while.
Credit is not so prevalent.
Consumers are using less credit.
Consumers are geared toward saving and paying down debts.
The US is heading into deep debt and thus higher interest rates.
Which will it be, more deflation or strong inflation?
Jobs are scarce and layoffs are still occurring.
Investors are still stung with massive losses.
The Dems are bent on raising every tax known to man.
Cap and trade will put enormous pressure on consumer utility bills.
The world economy is still falling as far as output goes.
Real Estate will not suddenly become more valuable.
Massive amounts of new capital will be needed to shore up banks and financials.
The stress test was equivalent to taking a pulse while sleeping.
States will need massive tax hikes to even stay afloat.
Many are declaring bankruptcy which will mean fewer new credit accounts created.
Many buildings will go empty as business closes and consolidates.
New construction with so much unused space now?
And the list goes on and on.....
Buy deep in the money put options on RIMM, OIH, BG, CME, AGU, AMZN, APA and MA. Use stops and be quick to exit if some of these head back toward their recent highs. We could see a move back down to S&P 500 in the 750-800 area over the next few months. The markets look rather exhausted for now as all the hoopla about a sudden reversal in the economy dies down.
Look at oil. Where is the demand? Go short above $60 and look for move back toward $50 and maybe to the $45 area. The fundamentals do not support current prices. Recall the quick drop from $147 last year. Oil will creep up to $75-85, but not for a while or until demand levels out.
The true bull will not be charging this year. Perhaps sometime early next year. Most pundits think this is a normal economic pullback. They can't wait for the markets to come roaring back. That is because they know not how to make profits when markets fall, thus they are only half traders/investors who struggle to make their silly 5-10% yearly returns. It is up to you to make your own way in the markets and create your own trading program based on your beliefs. And, truth be known, you are an unlimited being. It is only society and governments and schools and religions that tell you that you cannot do this or that. Most of what you have been told and learned is BALDERDASH and HORSE-S..T.
Saturday, May 23, 2009
Friday, April 10, 2009
Full Steam Ahead Or?
The markets have been rallying rather strongly and fairly consistently. Nothing like the usual bullish-pop that often comes during a bear market. I would expect this rally to hit a wall after about a 35-40% move. So, there is still a ways to move up here. However, the BIG question being bandied about is whether of not we have seen the last of the big bad bear market. I have my suspicions. You can see the bullish tone wanting to explode to the upside as traders and investors are licking their chops at the market moving to new highs in the next several months. Really, the greedy are already spending those huge profits that will be coming over the next year or so.
Yes, it is tempting to say that the bull is back. A look at history tells us that this just may be the first of several bear market rallies that sucker the heck out of the always-bullish bulls. My bets are not so certain. I think there is still a lot of unknowns in the market as companies have less visibility toward earnings in the coming quarters. And, as we have seen over the last year and a half, there seems to always be another shoe to drop or some bad news lurking around the corner just when some company says the decks are clear.
I estimate that the GOV will be all but forced to ante up another $2 to 5 trillion to right the ship; i.e. keep it afloat. And that figure could be much higher over the next 2 or 3 years. And God only knows how much Obama will raise taxes to pay for all this government help. If the gov had been doing its job in the first place, much of this over usage of credit and the derivative catastrophe could have been avoided or at least tempered. Oh well, the best thing to do is to go your own way. Make your plans and plow ahead regardless of what the economy or the politicians say or do. They know nothing; or at least they know nothing that will make any difference to me and my wealth creation.
Areas to look at for trading include deep-in-the-money options on energy related stocks as well as some tech and maybe a few retail. Things like RIG, APA, UPL, AZO, RIMM, APPLE, and AMZN. Do not chase any of these. Wait for them to come to you in price. That is wait for a pullback to enter a trade. There are any number of stocks that can be traded in both directions. You don't have to be perfect in buying, but you do have to know when you are going to sell. And that goes for those stocks you have held for a decade or two. Why buy a stock, hold it for years and watch it go up and down? How can a sweet dividend save you when you stock has lost 20-60% in underlying value?
One thing that I think could happen is that we form a reverse head-and-shoulders pattern in the S&P 500. All we need is a correction back down to the November 2008 lows after we complete the current up-move. That would form the right hand shoulder and possibly confirm a bottom in this bear cycle. But who knows? This is still a time to be nimble as well as place a few longer term bets of selected stocks that will not fold. You can bet that companies like CAT, DE, CMI, AGU, POT, BTU, X and CLF will all eventually be much higher than today. The question is how soon? By the end of this year or the end of the 2010's (2020) or somewhere in between.
Any way, go your own way and make things work for yourself. The universe gives you all that you need and as you know, you are a creation of that universe. You have the power to create tremendous amounts of wealth if you so desire. Whatever you do, have fun and always look on the lighter side of things because after all it is only life.
Yes, it is tempting to say that the bull is back. A look at history tells us that this just may be the first of several bear market rallies that sucker the heck out of the always-bullish bulls. My bets are not so certain. I think there is still a lot of unknowns in the market as companies have less visibility toward earnings in the coming quarters. And, as we have seen over the last year and a half, there seems to always be another shoe to drop or some bad news lurking around the corner just when some company says the decks are clear.
I estimate that the GOV will be all but forced to ante up another $2 to 5 trillion to right the ship; i.e. keep it afloat. And that figure could be much higher over the next 2 or 3 years. And God only knows how much Obama will raise taxes to pay for all this government help. If the gov had been doing its job in the first place, much of this over usage of credit and the derivative catastrophe could have been avoided or at least tempered. Oh well, the best thing to do is to go your own way. Make your plans and plow ahead regardless of what the economy or the politicians say or do. They know nothing; or at least they know nothing that will make any difference to me and my wealth creation.
Areas to look at for trading include deep-in-the-money options on energy related stocks as well as some tech and maybe a few retail. Things like RIG, APA, UPL, AZO, RIMM, APPLE, and AMZN. Do not chase any of these. Wait for them to come to you in price. That is wait for a pullback to enter a trade. There are any number of stocks that can be traded in both directions. You don't have to be perfect in buying, but you do have to know when you are going to sell. And that goes for those stocks you have held for a decade or two. Why buy a stock, hold it for years and watch it go up and down? How can a sweet dividend save you when you stock has lost 20-60% in underlying value?
One thing that I think could happen is that we form a reverse head-and-shoulders pattern in the S&P 500. All we need is a correction back down to the November 2008 lows after we complete the current up-move. That would form the right hand shoulder and possibly confirm a bottom in this bear cycle. But who knows? This is still a time to be nimble as well as place a few longer term bets of selected stocks that will not fold. You can bet that companies like CAT, DE, CMI, AGU, POT, BTU, X and CLF will all eventually be much higher than today. The question is how soon? By the end of this year or the end of the 2010's (2020) or somewhere in between.
Any way, go your own way and make things work for yourself. The universe gives you all that you need and as you know, you are a creation of that universe. You have the power to create tremendous amounts of wealth if you so desire. Whatever you do, have fun and always look on the lighter side of things because after all it is only life.
Saturday, March 14, 2009
A New Bull Market?
Is the action in the markets over the past week the start of a new bull market? I don't believe so. There are still too many unknowns in the economy and even the world backdrop is unsettling. This is likely going to be a somewhat strong short-covering fueled rally that will eventually run out of steam. The result will be a retest of the lows in some form and some more sideways action until the economic picture becomes a bit less foggier.
Look to make a few upside trades on pullbacks with the idea that the S&P 500 could get back to the 900 area. As always, do not hesitate to bail out of positions if the markets do an 180. We still could see much downside pressure if earnings revisions start to come in well below expectations. It is interesting to note that the NYSE composite retested its 40 year uptrend line and has bounced well off of it this week. We are not out of the woods yet, as Obama and his socialistic nonsense is surely to put a damper on any sustained economic improvements. Raising taxes is downright stupid and it goes to show you communism is alive and well in the Democratic party. Just look at what they have done to California. Take care.
Look to make a few upside trades on pullbacks with the idea that the S&P 500 could get back to the 900 area. As always, do not hesitate to bail out of positions if the markets do an 180. We still could see much downside pressure if earnings revisions start to come in well below expectations. It is interesting to note that the NYSE composite retested its 40 year uptrend line and has bounced well off of it this week. We are not out of the woods yet, as Obama and his socialistic nonsense is surely to put a damper on any sustained economic improvements. Raising taxes is downright stupid and it goes to show you communism is alive and well in the Democratic party. Just look at what they have done to California. Take care.
Monday, March 2, 2009
The Obama Wealth Destruction Parade
Courtesy of Obama, the destruction of most wealth in the United States has commenced. This train wreck is traveling at full speed ahead as the Libs are determined to redistribute wealth in this country like never before. The only problem is is that with their outrageously dumb ideas and tactics, the wealth they hope to redistribute is quickly vanishing. Thus, these economic criminals are on track to create a massive welfare state compromised of all 57 states (according to the great one.) This fits with the ultimate Marxist policy of total support by the government for it citizens in the form of squalidly lower standards of living.
By the year 2015, you can expect to have your living standards cut by at least 2/3 and to be tied to the government teet (as it were) for well over 50% of your support. Laugh now, but sooner than you think, the joke will be on you. There has not been one solid, truthful, creative idea to come out of the Obama think tank. In fact, it is the sharks feeding in that tank that will ultimately come looking for you. I know, you think and believe that Obama has come to save the world. I just hope you have picked out your cave or at least can go buy a hammer and chisel to begin honing out your new meager existence.
The market, as in the S&P 500, is now at the doomsday line of 700. We may temporarily rally from some point nearby, but it is appearing to look like a steep slant to the bottom; as in S&P 450-500. Laugh again if you like. But this is the Obama mandate; that is to punish wealth. However, he forgot to check the stats to see that many middle-class Americans are losing their wealth on a daily basis. Either it will be stolen by the government under Obama, or stolen by wealth confiscation in the form of lower asset prices. The proof is in the pudding and right now that pudding is tasting awfully muddy.
For now, prepare to play the rallies as they will likely be rather short as they will be sparked by short covering and not supported by much enthusiastic buying. Then as the rallies fizzle, get out and short the market when it breaks to new lows. Hold positions until you see a rebound forming and maybe get back in on the long side. These moves have to be shorter term, for the markets are likely to remain unsettled for perhaps the next year or two.
As we keep throwing good money after bad in the form of bailouts from A to Z, the government is setting us up for continued wealth destruction with massive amounts of new debt that will NEVER be paid back. When AIG creates 30-40 times assets in leveraged monstrosities (mortgage thing-a-ma-bobbies) to the tune of $500 billion, you can figure that the resulting derivative crash has left a huge hole in the finances at AIG. Perhaps it will take some $5-10 TRILLION to finally get this pig oinking again. Yikes. Not even Obama can count that high.
This is where we are. We as a nation cannot bail out every thing and every one. But, the Libs will try. Without capitalism, we are doomed. The dark night of the Obamanitwits has arrived and they have come for your pocketbook and your soul. It is time to run for the hills and hunker down for the next 20 years. And don't worry about heating your new cave since ol' Al Gore has promised global warming to save us from freezing. If you have recently bought a Snuggie, well you can sell it in a garage sale and at least make back the shipping costs. See, all is not so bleak and desolate after all. But the Libs are working on it for sure!!
By the year 2015, you can expect to have your living standards cut by at least 2/3 and to be tied to the government teet (as it were) for well over 50% of your support. Laugh now, but sooner than you think, the joke will be on you. There has not been one solid, truthful, creative idea to come out of the Obama think tank. In fact, it is the sharks feeding in that tank that will ultimately come looking for you. I know, you think and believe that Obama has come to save the world. I just hope you have picked out your cave or at least can go buy a hammer and chisel to begin honing out your new meager existence.
The market, as in the S&P 500, is now at the doomsday line of 700. We may temporarily rally from some point nearby, but it is appearing to look like a steep slant to the bottom; as in S&P 450-500. Laugh again if you like. But this is the Obama mandate; that is to punish wealth. However, he forgot to check the stats to see that many middle-class Americans are losing their wealth on a daily basis. Either it will be stolen by the government under Obama, or stolen by wealth confiscation in the form of lower asset prices. The proof is in the pudding and right now that pudding is tasting awfully muddy.
For now, prepare to play the rallies as they will likely be rather short as they will be sparked by short covering and not supported by much enthusiastic buying. Then as the rallies fizzle, get out and short the market when it breaks to new lows. Hold positions until you see a rebound forming and maybe get back in on the long side. These moves have to be shorter term, for the markets are likely to remain unsettled for perhaps the next year or two.
As we keep throwing good money after bad in the form of bailouts from A to Z, the government is setting us up for continued wealth destruction with massive amounts of new debt that will NEVER be paid back. When AIG creates 30-40 times assets in leveraged monstrosities (mortgage thing-a-ma-bobbies) to the tune of $500 billion, you can figure that the resulting derivative crash has left a huge hole in the finances at AIG. Perhaps it will take some $5-10 TRILLION to finally get this pig oinking again. Yikes. Not even Obama can count that high.
This is where we are. We as a nation cannot bail out every thing and every one. But, the Libs will try. Without capitalism, we are doomed. The dark night of the Obamanitwits has arrived and they have come for your pocketbook and your soul. It is time to run for the hills and hunker down for the next 20 years. And don't worry about heating your new cave since ol' Al Gore has promised global warming to save us from freezing. If you have recently bought a Snuggie, well you can sell it in a garage sale and at least make back the shipping costs. See, all is not so bleak and desolate after all. But the Libs are working on it for sure!!
Sunday, March 1, 2009
Here We Are In The Throat Of The Lion
As March is about to roar in like a lion, the markets look to be poised for a severe thrashing. Or, one might say that investors and traders are about to get eaten alive by that lion. The S&P 500 index is now at 735 or there about and this level is most critical. Failure to hold here during the coming week may signal a definite downturn as the S&P index plummets toward 600 or even 500.
Talk about losing confidence, this will be the catapult of a major exit of players in the markets, both short and long term traders. I still feel that we will somehow hold the line here, but I have to admit that it is looking rather distressful. Perhaps a swift crash to below 700 will be enough to get a deeply oversold reversal that could possibly pick up a little steam to the upside. I don't think we need a huge thunderstorm of fear and discontent to hit a bottom. We could just trail a bit sideways for a while and form some kind of a base in the 700-750 area.
In any event, it will prove most interesting and more so challenging to trade and invest during this time. But that is life and this period we find ourselves in is most invigorating from the standpoint of not having experienced this type of economy or market in such a long time. Life is meant to be this way in that obstacles are always present and it is within ourselves to overcame these digressions of the norm. Take heart that at some point we will be able to look back and congratulate ourselves for not losing our collective heads and jumping off a cliff. Now if the government will only stand fast and let the market do its work. Free enterprise will always work itself to the most constructive and profitable level if left alone to work as it should.
Some good buys are appearing in the markets. I think oil and related companies are at a good entry point. Even if we get down below $30 a barrel, those prices will not last for long. Going back 10 or even 20 years with oil at $15 or $20 a barrel, the cost should be $25-30 adjusted for inflation and demand/supply metrics. Some of the stocks I like (and deep-in-the-money-options) are US Steel, symbol X, Cliffs Natural Resources, symbol CLF, Apache Corp, APA, Agrium, AGU, Mosaic, MOS, Potash, POT, Flowserve FLS, and Sohu, SOHU. Some of these are still in downtrends, but based on their depressed prices, they look to be ready to at least reverse course for a short term trade. And some others are in some sort of uptrend and can be bought on pullbacks. As always, look at a price chart to see the trend. Do not chase the upside and do not load the boat. Don't rush to make heavy long term bets just yet, but it is certainly OK to nibble at companies that are well run, in good financial shape and where prices are severely smashed down. No banks or home builders or retailers should be bought yet. Or, at the very least, plan to make short trades with your finger on the eject button.
Again, do some work on your own by studying price charts to get a feel for how the market is trading. Prices can move higher in some stocks while moving lower in others. Still, keep a weathered eye on the S&P 500 index and if it trades below 700, hold back on buying and exit some of your trades to minimize risk. We may look back and see that this was a great time to buy. Hopefully, that is where we are or at least getting closer toward that place in time. If we get a humongous up day of at least 400 points or more, this may signal a good time to buy as we may get a relatively strong rally lasting several weeks or months. Stay tuned and stay alert.
Talk about losing confidence, this will be the catapult of a major exit of players in the markets, both short and long term traders. I still feel that we will somehow hold the line here, but I have to admit that it is looking rather distressful. Perhaps a swift crash to below 700 will be enough to get a deeply oversold reversal that could possibly pick up a little steam to the upside. I don't think we need a huge thunderstorm of fear and discontent to hit a bottom. We could just trail a bit sideways for a while and form some kind of a base in the 700-750 area.
In any event, it will prove most interesting and more so challenging to trade and invest during this time. But that is life and this period we find ourselves in is most invigorating from the standpoint of not having experienced this type of economy or market in such a long time. Life is meant to be this way in that obstacles are always present and it is within ourselves to overcame these digressions of the norm. Take heart that at some point we will be able to look back and congratulate ourselves for not losing our collective heads and jumping off a cliff. Now if the government will only stand fast and let the market do its work. Free enterprise will always work itself to the most constructive and profitable level if left alone to work as it should.
Some good buys are appearing in the markets. I think oil and related companies are at a good entry point. Even if we get down below $30 a barrel, those prices will not last for long. Going back 10 or even 20 years with oil at $15 or $20 a barrel, the cost should be $25-30 adjusted for inflation and demand/supply metrics. Some of the stocks I like (and deep-in-the-money-options) are US Steel, symbol X, Cliffs Natural Resources, symbol CLF, Apache Corp, APA, Agrium, AGU, Mosaic, MOS, Potash, POT, Flowserve FLS, and Sohu, SOHU. Some of these are still in downtrends, but based on their depressed prices, they look to be ready to at least reverse course for a short term trade. And some others are in some sort of uptrend and can be bought on pullbacks. As always, look at a price chart to see the trend. Do not chase the upside and do not load the boat. Don't rush to make heavy long term bets just yet, but it is certainly OK to nibble at companies that are well run, in good financial shape and where prices are severely smashed down. No banks or home builders or retailers should be bought yet. Or, at the very least, plan to make short trades with your finger on the eject button.
Again, do some work on your own by studying price charts to get a feel for how the market is trading. Prices can move higher in some stocks while moving lower in others. Still, keep a weathered eye on the S&P 500 index and if it trades below 700, hold back on buying and exit some of your trades to minimize risk. We may look back and see that this was a great time to buy. Hopefully, that is where we are or at least getting closer toward that place in time. If we get a humongous up day of at least 400 points or more, this may signal a good time to buy as we may get a relatively strong rally lasting several weeks or months. Stay tuned and stay alert.
Thursday, February 26, 2009
At The Crossroads
With the new Obama spend-and-tax-a-thon now well under way, the stock markets, as well as most other markets, face a tough road ahead. Most critical is the S&P 500 range of 735-755, where we closed today. Looking at a 20 year chart of this index, one will see this extremely critical level in true perspective and what it means for the markets if it breaks seriously to the downside. Like an elevator with no breaks on a downward cycle, the next major support level is about 500.
Obama's crusade to turn the poor into the rich will fail miserably as asset classes of all kinds continue to go crunch in the night. Asset levels are melting faster than an Algorian ice berg floating in the once-upon-a-time polar ice caps. The Libs are well on the way to completing the total destruction of the rich and the hopes and dreams of just about all the rest of us. If the markets fail to hold these current levels, not only will prices escalate downward, but confidence will be all but totally destroyed.
Can you say MAXIMUM DEPRESSION? Forget the 1930's. What will evolve over the next 2 or 3 years will be a violent and complete wasting away of 80% of the wealth of this country. And to think, as Obamanazis do, that all this lost wealth will suddenly appear in the coffers of the poor is strictly utter nonsense and economic-voodooism on an unprecedented scale. Doubt this future? We are teetering on the brink of oblivion (financial Armageddon) and the return to the stone age, where Libs feel most at ease. That is because 98% of the population will all have and be and live the same while a select few of the "chosen socialists" will enjoy superior living standards.
Think it can't happen? Gee, you only have to see what has transpired in the last 2-3 years and take a deep, hard look at the proposed fixes. Can you see any wealth distribution in the cards? It is easily spelled out in the Obama budget, which by the way, is only the beginning of a massive tax hike meant to destroy not the rich, but the middle class. Scared yet? Don't fret booby, the Libs will have a "save-everyone-at-all-costs-plan" that will be certain to make all of you ex-middle classer's just a nickle or two better off than the newly created class of not-so-poor-people. What a joke!!!!!
So, all this might not transpire as the markets could hold the line and begin to rally a bit and then back and fill to create a base to propel upward from. Then again.....All this might not matter since the world is supposed to end on December 21, 2012. See, it does not pay to fret and worry and have spastic attacks of stress just because the financial system is sinking toward Atlantis. In the next 3 years and some odd months remaining, it will do a soul good to party like its 1999. No fears here my friends. Let the bubbly flow and the dancing girls enter the scene.
Obama's crusade to turn the poor into the rich will fail miserably as asset classes of all kinds continue to go crunch in the night. Asset levels are melting faster than an Algorian ice berg floating in the once-upon-a-time polar ice caps. The Libs are well on the way to completing the total destruction of the rich and the hopes and dreams of just about all the rest of us. If the markets fail to hold these current levels, not only will prices escalate downward, but confidence will be all but totally destroyed.
Can you say MAXIMUM DEPRESSION? Forget the 1930's. What will evolve over the next 2 or 3 years will be a violent and complete wasting away of 80% of the wealth of this country. And to think, as Obamanazis do, that all this lost wealth will suddenly appear in the coffers of the poor is strictly utter nonsense and economic-voodooism on an unprecedented scale. Doubt this future? We are teetering on the brink of oblivion (financial Armageddon) and the return to the stone age, where Libs feel most at ease. That is because 98% of the population will all have and be and live the same while a select few of the "chosen socialists" will enjoy superior living standards.
Think it can't happen? Gee, you only have to see what has transpired in the last 2-3 years and take a deep, hard look at the proposed fixes. Can you see any wealth distribution in the cards? It is easily spelled out in the Obama budget, which by the way, is only the beginning of a massive tax hike meant to destroy not the rich, but the middle class. Scared yet? Don't fret booby, the Libs will have a "save-everyone-at-all-costs-plan" that will be certain to make all of you ex-middle classer's just a nickle or two better off than the newly created class of not-so-poor-people. What a joke!!!!!
So, all this might not transpire as the markets could hold the line and begin to rally a bit and then back and fill to create a base to propel upward from. Then again.....All this might not matter since the world is supposed to end on December 21, 2012. See, it does not pay to fret and worry and have spastic attacks of stress just because the financial system is sinking toward Atlantis. In the next 3 years and some odd months remaining, it will do a soul good to party like its 1999. No fears here my friends. Let the bubbly flow and the dancing girls enter the scene.
Monday, February 23, 2009
Traders Are Not Convinced
The market action has again become truly ugly and a bit panicky. Well maybe not so much as last October-November when the VIX hit 80. It is currently still hovering in the 50's which is very much above any sane levels. The government, headed by Obama and his harem of cronies, has done little to convince the markets that they know what the solutions are for what ails the financial system in the US. I, for one, am not at all ready to jump on the "save the economy at all costs" bandwagon. The further we go down this road, the deeper the trench we dig and the chances of ever escaping are becoming relatively slimmer and slimmer.
You can create a well functioning financial system like we have experienced for over a hundred years, but that does not mean it does not have limits that even a corrupt government cannot exploit. Ladies and gentlemen, the current government is destroying our financial system by throwing tons of debt at the problems which, by the way, we mostly created by a complete over-use of our debt system. And I am not letting the previous administrations of the hook. Especially Congress over the last decade has much to answer for. Of course they never will when the likes of Teddy K continuously get re-elected without so much as a second thought, you can see that things will never change.
You can compare this current mess with the current IRS abomination. Go ahead and be fearless and get yourself a copy of the tax code and waddle through it for a few hours. You will see a morass of misconstrued conundrums and illogical misconceptions beyond human belief. Our economy and the banking mess, complete with mis-trusted derivatives and the total mis-guidence of those million $$ CEO'S and the rest, have helped to create this blob of nincompoopiness beyond any rationality. What ever happened to KISS in this country? Certainly such systems as created by the punch-drunk Congress can be made to be simple and understandable as well as guarded against false Madoffathons intent on stealing every dollar in sight.
It is really funny that those who have made millions and billions over the last few decades by shystering the rest of us will hardly suffer more than the sting of a bee. It is the followers and believers who have and will continue to be fleeced and taken to the cleaners as well as flogged and beaten senseless. I am not saying that those who have earned their riches are not entitled to them, on the contrary. But it is those who take and take and then proceed to want to steal more that ruffle my feathers. And Obama, who wishes to save the world as well as save ourselves from ourselves, will be no great shakes in the end. Steering by the current course, we are headed toward a monstrous disaster of unmitigated proportions. Over the next few years we may go where no man has gone before and never return for many decades, if at all.
I hate to sound bleak and negative, but take a look a what has and is happening. There is simply little confidence in government to save anything at this point. In fact, the more we rely and expect the government to do the more will never be done. Simply, this economy is born of great business creation, large and small, and that is the only lasting salvation...let the markets take care of themselves, as they have for hundreds of years. Sure, there will be blood in the streets, but the quicker the better; for when the dust settles, we will have the makin's for a substantial period of growth and propriety. Let the gov interfere by putting bandages on the cuts and we will experience a slow, excruciating and extremely painful death with nothing but socialism and fascism to replace our proven capitalistic system.
As far as trading goes, it is probably too late to use puts to trade since a turn-around may be close at hand. Or at least a reflex rally of significant proportions. So, be looking to initiate positions with call options when we get some upside momentum going. We should get a decent rally of some sort in the coming weeks or in the next month or two. And, use some sort of stop-loss to limit your losses. As an example, say the S&P 500 falls to 700 then starts to rebound and you get into your option positions when the S&P is at 720. Then if the average was to trade below 700, you would exit your positions to protect your capital. Perhaps we get a rally back to 800-810 on the S&P's and then go down to 650 or 600 or Heaven forbid even lower. I think we could get a sharp rally of 100+ points (S&P) and then go back to test the lows. Or, we could get a monumental rally back up to 900 or even a 1,000 before retesting the lows. I do not think we will do a turnaround and directly head into a new bull market.
Remember to use a stop loss and be prepared for a reversal of some kind as the averages get into a deeper oversold condition. And keep the faith that you will be able to survive and thrive under these current conditions by having confidence in yourself first and not rely on Washington to bail you out.
You can create a well functioning financial system like we have experienced for over a hundred years, but that does not mean it does not have limits that even a corrupt government cannot exploit. Ladies and gentlemen, the current government is destroying our financial system by throwing tons of debt at the problems which, by the way, we mostly created by a complete over-use of our debt system. And I am not letting the previous administrations of the hook. Especially Congress over the last decade has much to answer for. Of course they never will when the likes of Teddy K continuously get re-elected without so much as a second thought, you can see that things will never change.
You can compare this current mess with the current IRS abomination. Go ahead and be fearless and get yourself a copy of the tax code and waddle through it for a few hours. You will see a morass of misconstrued conundrums and illogical misconceptions beyond human belief. Our economy and the banking mess, complete with mis-trusted derivatives and the total mis-guidence of those million $$ CEO'S and the rest, have helped to create this blob of nincompoopiness beyond any rationality. What ever happened to KISS in this country? Certainly such systems as created by the punch-drunk Congress can be made to be simple and understandable as well as guarded against false Madoffathons intent on stealing every dollar in sight.
It is really funny that those who have made millions and billions over the last few decades by shystering the rest of us will hardly suffer more than the sting of a bee. It is the followers and believers who have and will continue to be fleeced and taken to the cleaners as well as flogged and beaten senseless. I am not saying that those who have earned their riches are not entitled to them, on the contrary. But it is those who take and take and then proceed to want to steal more that ruffle my feathers. And Obama, who wishes to save the world as well as save ourselves from ourselves, will be no great shakes in the end. Steering by the current course, we are headed toward a monstrous disaster of unmitigated proportions. Over the next few years we may go where no man has gone before and never return for many decades, if at all.
I hate to sound bleak and negative, but take a look a what has and is happening. There is simply little confidence in government to save anything at this point. In fact, the more we rely and expect the government to do the more will never be done. Simply, this economy is born of great business creation, large and small, and that is the only lasting salvation...let the markets take care of themselves, as they have for hundreds of years. Sure, there will be blood in the streets, but the quicker the better; for when the dust settles, we will have the makin's for a substantial period of growth and propriety. Let the gov interfere by putting bandages on the cuts and we will experience a slow, excruciating and extremely painful death with nothing but socialism and fascism to replace our proven capitalistic system.
As far as trading goes, it is probably too late to use puts to trade since a turn-around may be close at hand. Or at least a reflex rally of significant proportions. So, be looking to initiate positions with call options when we get some upside momentum going. We should get a decent rally of some sort in the coming weeks or in the next month or two. And, use some sort of stop-loss to limit your losses. As an example, say the S&P 500 falls to 700 then starts to rebound and you get into your option positions when the S&P is at 720. Then if the average was to trade below 700, you would exit your positions to protect your capital. Perhaps we get a rally back to 800-810 on the S&P's and then go down to 650 or 600 or Heaven forbid even lower. I think we could get a sharp rally of 100+ points (S&P) and then go back to test the lows. Or, we could get a monumental rally back up to 900 or even a 1,000 before retesting the lows. I do not think we will do a turnaround and directly head into a new bull market.
Remember to use a stop loss and be prepared for a reversal of some kind as the averages get into a deeper oversold condition. And keep the faith that you will be able to survive and thrive under these current conditions by having confidence in yourself first and not rely on Washington to bail you out.
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