Friday, March 27, 2009
Charts as Promised
I know the China miracle as well as the Emerging Markets story. I just can't help wondering how these traditionally easy to get in, hard to get out markets will react if things over here don't turn around and recover later this year as many of the 'rally lovers' claim.
Remember these pundits who are enamored with this rally and are claiming recovery around the corner never, never saw any of this coming. My gut tells me that violent rallies like that of the past 2 weeks are not bottoms. Bottoms form quietly after all have taken their ball and gone home.
Not amidst a party like atmosphere with celebrities and pretty faces calling bottoms. I find it extremely interesting that noted short seller Doug Kass has vehemently called a bottom here. I like Doug and he does his homework but wouldn't it be fitting that the market discredits not only the perma-longs but the perma-shorts before bottoming.
I also cannot help but acknowledging that it was the pros who bought the head fake rally in 1930 only to get crushed in the next leg down. Could this be happening once again as many thoughtful, respected pros who avoided getting caught in this mess are now jumping in. Will they need to be crushed before we TRULY and solidly bottom. My gut tells me yes though the market could care less what my mind or my gut thinks.
Just some items to consider the next time Propaganda Central aka CNBC hypes the latest day's rally.
Remember that sometimes he who loses the least is the winner. Now if only one Joe Cassano of AIG had understood and respected this mantra.
Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".
Long 1 unit Ultashort 20yr Treasury ticker TBT @ $44.25 stop @ $43.74
Long 2 units Ultrashort Real Estate ticker SRS @ $49.85 stop @ $49.78
Long 1 unit Ultrashort Emerging Mkts ticker EEV @ $38.75 stop @ $36.18
Long 1 unit Ultrashort China 25 ticker FXP @ $25.15 stop @ $23.38
Short 1 unit Microsoft ticker MSFT @ $19.20 stop @ $19.20