I'm looking for some smaller beaten down companies that are lagging the overall move we've had. You'll notice that as you go deeper into a bullish move it lifts all boats. That's been a very strong trend for years, since at least when I started doing this and I am sure before that. A rising market lifts all stocks, even the crappy ones. The question is, how high do we go in this move. I still think there's a decent shot we see 10,300 on this move. I'm making money from the long side for now, but again looking for entries longer term for shorts. The fear is always that you'll miss a move one way or another, part of good trading is not worrying about moves you miss, just concentrate on the ones in front of you. This week also watch the reaction to the disappointments regarding Black Friday. The bulls will argue its priced in, the bears will rightfully so say thats absurd since we aren't coming out of this for at least 3 to 5 years. The question is, NEAR TERM what does the market do. Right now its telling us that it feels that Obama is going to save the world and that we'll be out of this in a jiff! While I feel that is completely and utterly wrong and idiotic, I try not to fight the market, I try to be zen and go with it, and I suggest you try to do the same. So, while I remain FIRMLY in the DOW below 5000 in 2009 camp, I am hoping we get a further push to the top end of my range as I believe it will provide easy entries to the downside then.
The concern for me is that there is increasing unrest civily around the globe. New Zealand, Iceland and even China have had issues with this. What happens when people here realize that they really are on the hook for all the money the government has basically, in my opinion, thrown into the wishing well. How in the world they can justify what they just did with Citibank is scary. We are now at roughly 6 TRILLION the taxpayer is on the hook for, without real representation and with no end in sight. While we may or may not get a tax raise in the next year or two, and in fact they may cut taxes, its all PHONEY MONEY. It just devalues the dollar and when people realize that their money has been stolen from them by the Fed, I am freightened to think what is going to happen potentially to the fiber of our nation. They are stealing money from the poor to prop up the rich who already died. Citibank is worth negative $350 BIL, why would you save it? It's too big to fail? That's the biggest lie we now have. I'd take my chances, let it fail, let GM fail, let AIG fail, let GS in particular fail, let them all fail. This misplaced fear that the entire system will fold is BS at best, and a blatant disasterous lie at worst. I opt for the latter given the choice. What's mind boggling is that the Fed is trying to recreate EXACTLY what it was that got us into the mess! And, they are repeating Japan's mistakes from which they still haven't recovered. Citibank will go under, so will GM, so will AIG, so will 1/2 the big banks out there, and many insurers. All we are doing is delaying the inevitable. I suggest you listen to the people who are negative on what the government is doing. You may or may not agree, but I've found over the years that naysayers (not conspiracy theorists who are just nutty often times) are the smartest and most right group. Buy side analysts have a conflct of interest, its like listening to the guy from Pimco say that the government is doing all the right things. Of course he feels that way, it helps him directly what they are doing. Reality, I find, is unbiased, and that's where I try to skew. We are facing potentially the biggest crisis we've ever known, and that includes the "Great" Depression. I am looking for some suggestions from YOU guys and gals, send me an email if you have any ideas as far as protecting yourself in a Depression. Some people like Gold, some people like real estate, some think the dollar will be best. If you have any real, educated ideas, let me know. I think that we'll need some hard answers as we move forward through this mess. It's just unfortunate that we have a government right now that is intent on laying the burden on we the taxpayer and that is going to have potentially disasterous consequences. If they would let some of these companies fail they would have a lot more gun powder to rebuild. Now, I fear, we are shooting our load and in so doing we are condemning the collective us to something far far worse then "too big to fail".
Watch the market reaction early this week. If we can't shrug off the bad news we may be headed back down near term. If we can bounce then we have another leg up. I'm still loving the financials SHORT, but this move needs to play itself out. When it does, whether it be this week, or mid-January/February this market is going to see depths that will shock people and ruin 100,000s of people's retirement. I wish they would all take this move higher here to take ALL these money out of the market, but unfortunately my voice is pretty limited and too many people have been doped into thinking that if they hold for 10 years it'll be fine. Really? Japan's markets are down 80% from their peak in the 1990s. 80% and it's 18 years later! That logic didn't work there and its unlikely to work here. I repeat, GET OUT if you have money in the market - GET OUT, before its too late. We may get a further bump, get out while you can is my opinion, take it for what it's worth!