Wednesday, December 17, 2008

Have You Lost Your Mind?

The question is Have you lost your marbles? Why are you getting short yet again given all the calls for a year end so-called Santa Clause rally? Simple. The facts, and there are plenty, continue to point for much, much more downside to the indices. Besides when everyone gets on one side of the boat it tends to tip over. I am very comfortable that many long time bears are throwing in the towel and getting neutral or even bullish under the shallow guise of valuations. We shall see what happens to stocks when the E of P/E vanishes.

I cannot give any credence or credibility to any of these purported pundits who never saw any of this coming yet feel fully justified is trying to tell me it is over. Sorry but the likes of Bob Doll, Paul McCulley et al could tell me the Earth is round and I would fully double check and verify that it is NOT flat but indeed round. For to simply take these babbling shills at their word, and make no mistake, they are most certainly are shills with their last concern being your financial well being, well then, let's just say I would fully deserve the severe monetary punishment I would most certainly receive.

I continue to look at;

1. The yen. This is the carry trade vehicle of choice and as it rises it spells more and more de-leveraging.

2. The long bond and for those that do not or cannot follow it the TLT's. It like the yen continues to make new highs as people will pay for safety.

3. The earnings picture along with the employment is getting worse by the week. This is going to lead to a continual worsening of the housing and foreclosure situation. I realise the pundits are calling for things to get better in this area but it is not based on facts but rather hopes and prayers, just like this current rally.

4. The Fed has pulled it's proverbial pants down in a desperate attempt to repair the unrepairable. When a hurricane is coming you simply cannot change that fact you can only get out of the way and head for safe ground. I only wish the Fed, the Treasury, the Congress, the Senate, the administration, would get this through their thick skulls.

I am truly more afraid of not being on board as this train continues downward. You must remember the market wants as few participants aboard as possible, in either direction I might add bull or bear. That said, crashes tend to occur from extremely oversold conditions just as many start to believe because it hasn't happened it won't. This bear market demands your utmost attention and those who scoff at its intensity and strength will pay dearly.

Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:

Long 1 unit Ultrashort Real Estate ticker SRS @ $54.10 stop @ $51.10
Long 1 unit Ultrashort Financials ticker SKF @ $103.20 stop @ $98.90
Long 1 unit Ultrashort S&P500 ticker SDS @ $80.40 stop @ $78.12

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