I have some thoughts on the market and if you want to skip a quick story, just jump down to "AND NOW BACK TO THE MARKET"
I went out to my boat today for the first time in May and what I saw was extremely surprising to me. The dock my slip is in has about 20 slips in the covered area and about 40 slips uncovered. Up until today, all 20 covered slips were full of boats and the uncovered slips varied on each trip due to they are used for boat sales, not really for leasing by individuals.
But today, the boats were gone. Of the 20 covered slips, only 7 were occupied. They were not out on the lake. They were gone. Boat slip leases end in April or September. I was told there were going to be many slips to choose from all around the lake after April, but I had no idea it was going to be like this.
The uncovered slips were about half full (15 boats) but upon further inspection, all but 3 of these boats appear to be part of an auction coming up. You see, the dock I am at is the local Sales Doc which means that is where dealers send their boats to be reviewed and test driven. But these boats were labelled with a number just like an auction.
Well, while cleaning up my boat, a number of people had come down at varying times to look at those boats. Obviously previewing them before the auction.
Anyways, it was a sign of the time. Boaters are avid about their boats and their slips. I really didn't think the down economy was effecting boaters much. To see so many slips empty and to see so many boats up for auction is disheartening. Scary and sad.
AND NOW BACK TO THE MARKET
If it were not for the VIX insisting on staying below the 20 dma, I would be pounding the table that the market is about to slide. My instincts say the market is exhausted, fundamentals are poor and the economy is not yet in recovery, contrary to what some are saying.
But the VIX is telling me "not so fast, Brian".
There were a couple of things in today's "bounce" that would disturb me as a long. First, we had 3 down days and one pretty big down day the day before. Yet the rally today just could not get legs like it has the past 6-8 weeks where a down day like Wednesday would be followed by an equal and opposite up day the next day.
Also, the slide at the end of the day, yet again, is a signal the bulls do not want to be holding overnight. The fear factor.
I sense a lot of fear in this market right now. Bulls want to believe things are getting better but there is no confirmation in the numbers that are coming out. Unemployment higher than expected. Media says it is the Chrysler effect. Uh, no way Jose. Sure Chrysler may have some effect but not within a week. These numbers are real and the bulls better start believing them.
As real confirmation, retail numbers are down, house prices are down and consumer spending is down. What other info is needed for confirmation?
We are headed for a major move down in the market. The question is, when? I wish I can answer it but for now, I am positioned for a downward movement and plenty of cash on the side to capitalize once the VIX gives me technical confirmation.
The TA guys are saying that we will go higher and probably to 940. That we must touch the 200 dma. Well, to tell the truth, what I would like to see more than anything is to go up to about 925 or 930 and for the rally to fail. This would be confirmation that the rally has ended and we are headed for the correction that the markets fundamentals really need.
But I don't think we are headed up in the 930 range. I think this weeks action shows that the bulls have doubts and once the data continues in that shows things are not what they have been told they are, the fear will overwhelm the bulls and we will head down to test that 770 area again. I think this will happen fairly soon, as in before the end of June.