Monday, August 20, 2007

Monday Morning Thoughts.

Is this all they can muster? Don't they realize this is the buying opportunity of a lifetime or could it just be the hook. The volume on this rally remains unimpressive. Yes, I see the the hammers all over the place. I just do not see the feds action as anything more than a compress to hemorrhaging wound. Nouriel Roubini makes a good case regarding this to be an insolvency issue rather than one of illiquidity and I have a hard time countering his arguments. Nobody is fessing up to what they own and what their losses are. No one is marking to market and biting the bullet. I will repeat myself again, the Japanese banks tried the same strategy of 'ignore it and it will go away'. The problem is it will not, for evidentiary proof look to the Nikkei, look to Japanese real estate, and look to the Japanese banks.

Rallies in this market are to be sold not weakness bought. if you are long it is a chance to lock in gains and minimize downside risk which I view as SUBSTANTIAL. This rally is an absolute gift, take it. The television pundits continue to do segments on where to hide in this market, well I have a a novel concept, how about cash ? Oh sorry, thats boring and doesnt make any of the sponsors and advertisers any fees of consequence.

We will get our opporunity to go long the commodity bull which is in a correction. Continue to do re-con on the energy(oils/oil service/coal, etc. the precious metals. Energy is in a short term correction long term bull market as are gold and silver. Do not lose sight of this.

Does it bother anyone else that U.S. Comptroller General David Walker compared the current United States to end of the Roman empire? This is not some black helicopter whack job here talking, although he must be making the reigning cognoscenti particularly uncomfortable. Remember to cut off your losers and add to your winners. Good trading to you all.

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