Make It Or Break It

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.