Wednesday, August 18, 2010

Avoid The $Market - Yesterday's $Rally Nothing More Then A $Bull Trap

About the only reasons the market went up yesterday were its oversold condition, POT getting a bid from BHP (which was the only reason for the increase in volume in the market), and the FED pumping liquidity in from its POMO actions.  Otherwise there was nothing to get excited about as thin stocks and beaten down stocks and groups moved higher. 

Volume across the majority of stocks that could be considered leaders was extremely low.  Volume in the market rose only because of the enormous volume in the fertilizer stocks and related stocks.  We can argue it's August, but when they want to buy they buy.  It would have been more impressive if volume would have risen minus the extraordinary volume in the Fertilizer and related stocks.

Maintain cash levels and look for shorts.  If you don't short, go on vacation for the rest of the month and maybe beyond.  Too soon to look out that far, but it doesn't look good.

Good Luck

Friday, August 13, 2010

Sell $Stocks and $Market Into Strength

The underlying leadership suffered a significant blow this week.  Without a miracle here, and I don't expect one, the market is poised to test the July lows at a minimum.  There is no need to hold anything long.  It would be like trying to find a needle in a haystack, to find the one or two stocks that might buck the market's trend.

Wednesday, August 11, 2010

$Cash - Continue to Recommend Cash

Since the start of the rally it has been hard to get bullish even though there was evidence of a possible start of a tradeable rally or even a bull market.  But the entire time, my model refused to go to a buy signal.  Generally that has meant that unless you are really nimble, you're best position is in cash.

The market continues its main theme, following the Euro/Yen conversion.  As long as we stay correlated to the Euro/Yen we cannot expect the market to have its own mind.

Today's action is very worrisome.  Not because it is a big down day on heavy volume, but because the market cannot keep up with the mini bounces in the Euro/Yen conversion.  The last time we saw this action the market made new lows.  So the market and the Euro/Yen conversion are now at even more critical levels then before.  If  today's or this week's  lows cannot hold over the next week, we will most likely test the year's lows at a minimum.

Stay in cash and be patient.

Thursday, August 05, 2010

Remain in $Cash - No Need to Gamble Ahead of Tomorrow's $Job Report

Market continues to muddle at a critical level.  With tomorrow's job's report looming, any longs or shorts ahead of it would be nothing more then a spin of the roulette wheel bet.  Irregardless of the number, whatever direction the market chooses to take tomorrow, there will still be plenty of time to participate on either side of the trade. 

I've personally been taking some well needed time off, peaking in from time to time of course.  So stay patient and prepared.  With the summer doldrums upon us, you might be well served in joining me on a mental retreat.  Whatever you miss in August, is generally more then made up for in the fall.