Markets Doing Battle At Their 200 Day Moving Averages

The markets are now deciding their next major move. Having retraced part of their downtrends, the markets are now upping and downing (zigging and zagging) across the 200 day M/A. This is pretty much the situation in the major markets. If the markets can somehow bounce positively off of their 200 ema's, then a new bull could be declared. However, I feel that this test will ultimately fail and we will not see much more upside from here. I believe we will test the lows of March and fall to newer lows. How low will we go? Ask Chubby Checker. Ever since he recorded "The Limbo Rock" in the early 1960's, this has been a question for the ages.

For now, I would wait to do any nibbling if you are a long term holder. If you are a trader, it is OK to play for rebounds from deeply oversold prices, just don't overstay your position in the hopes a new bull market is suddenly upon us. Look with a weathered eye to play the downside. Again, do not overstay your position since there will be countless short-covering mini-rallies. In other words, Jack Be Nimble, Jack Be Quick, less he be beaten with a bullish stick. Don't ask where that came from.

Watch the oil and energy related stocks for a major break in the near future. NO commodity market, including oil, will ever stay at lofty levels for long. Oil is going parabolic (if it hasn't already), which means super-quick thrusts to the downside. Never fear, the longer term price is headed for well over $200 in the next year or two. If you have a chance, dig back over the last 30 years or so and check out the charts of the 30 or so major commodities. You will see that in every case, moonshots eventually came crashing down to earth. Oil will not escape gravity, at least not this time. P.S....check back in 10 or 15 years on this one.

Despite what the Gov and the CNBC pundits spew on a daily basis, there will be no quick fix for the troubles we now face in housing and the credit markets. Yes, Matilda, eventually these markets will work themselves out and all will be well; that is just about the time the food riots start up around the world in force. Where are you now Jackie Richards? There is something about you that is so divine. You are young, though intriguing.

We are facing some major changes in the world ahead. That is OK. Just feast your eyeballs on some Martha Beck books and live and prosper and be at peace. The world will be just fine, Al Gore be damned. Global Warming is the biggest farce since, well, all the stock markets nonsense from the late 1990's-2000.

A last note. When Obama becomes Prez, get ready to chip in your life savings and more of your current earnings for the good of the country. Never mind that everyone DOES have an equal chance to make their lives worth living with whatever riches they so choose. Free GOV subs for all and may the great bald eagle drop a golden egg upon your lawn; or at least through your roof. The new "Demo-socialist Republic" will destroy this country faster than any Al-Gorian forecasted ice-cap melting ever will. Don't forget to get your ticket ahead of time for a trip to the South Pole. That is where the new in-crowd will be residing in the near future. No fear here, friends.