First off, hope everyone had a safe and mindful Memorial Day mini-vacation. On Tuesday its back to work, though. So, let's get cooking!
Market right now is Futures UP slightly overnight. Probably a pretty easy short for anyone up, though I guess its possible we get a big gap up tomorrow. I just don't see us going up early in the week much. We'll see soon enough. I would think that we can bounce later in the week, but it just doesn't seem, baring news, there is going to be much buying pressure early this week.
Last week you saw evidence of why it's tough to really stay long this market. The market almost always falls a LOT faster than it rises. This market has been teetering on a big drawdown for a while. Up volume has been pathetic recently and frankly we are way overvalued here. The economy continues to worsen. That's not a time you want to throw your money into the stock market, sorry. Warren Buffett over the weekend came out and said that he sees a LONG and BAD Recession (and that we're already in one - duh!).
The market has rallied off the March lows based on the notion that the 2nd half is going to be much better. This is as foolhardy a notion as I've heard in a long long time. Trust me, I hope I'm wrong, I'd rather be told here that "hey, Waxie, you said the economy would suck and its rocking!" then have us all feel the effects of what I believe is going to be a pretty devastating economic downturn.
I think the banks are just a gimme short. I think GS, SOV, C, WB are all clear shorts. I think MER is a short and I think LEH is a short and I think the SKF has a long way to go (inverse financials - so shorting them).
Look for us to retest and bust below the March lows in the not too distant future. While its still possible we'll see a new HOY, I doubt it now. We look like we may bounce at some point this week but then just remember the adage - sell in May and go away! It should work and be very good advice this year. Again, I hope I'm wrong, but for those of you who want to short the market, you're getting your chance.
If I am right, though, watch the ER (Russell), I think it should see under 700 at some pt this week. If it can't hold that then it'll see 675 pretty fast.
let's see what shakes, its a new week, I mean, maybe they come back buying, anything is possible.
Either way, remember to RULE!
FYI - if you haven't signed up for the 5 day LIVE New Jersey seminar, please email me @ email@example.com to sign up. There is a very nice money back guarantee being offered. I think now more than ever is a good time to learn how to rule this market, there are ample opps whether we go up or down, but in a down market you better have some skills or you are doomed to get crushed.