As noted the last couple of weeks, this drop in the market is as expected, is needed and makes perfect fundamentally as well as technical sense. There is a breakdown in technicals which clearly show the market has a fault line which could crack at any moment. Even if it doesn't, the market should see the lower 800's soon enough.
Sure it all seems clear when you look at the charts for SPX, NYSE, SSO, SKF, SRS, etc. etc. etc. But whenever things become complacent and seems too easy, you should be cautious. This is a game and the game makers always try to make it as difficult as possible. So we may see a bit of a jump in the market coming up especially this week with bank earnings coming out this week and next. Good reports from banks could lift the market (a.k.a. prop it up again) with false hope. This could cause a short squeeze and thus a higher market going into August.
So use some caution here. I have to stay leaning short but with plenty of leverage and money on the side to take advantage of any significant move up. We will see the low 800's but it is up to the game makers and PPT to decide how long they can keep things propped up.
GOOG could be a great short if the market makes another grand move up. Keep an eye on it. More competition coming into the search and online ad business.
BTW, has anyone noticed TBT? Wow. Go figure. Talk about a great buy for a longer term hold (3 months).
I did my part this week in helping the economy. I went to Best Buy to price out some home theater equipment. These on-floor sales guys are hurting. They really are becoming aggressive. Once I told them I would not be buying today, they tried to get me to talk with their manager. Sorry guys. First, this is not a car dealership. Second, I don't buy retail. I just shop at retail locations and then find it online for a lot less.
Anyway, after leaving, I did my online shopping and found a couple of killer deals on a Yamaha receiver and on some Klipsch speakers. Well, I thought I would go back to Best Buy and give them one shot at matching these deals. After about 10-15 minutes and some time from the manager, they not only met the prices, the slightly beat them. Their point... They have to move inventory and they want me and my friends coming back.
So, kudos to the bad economy in letting me get the home theater sound system I wanted for a lot less than I thought. Everyone should be looking for killer deals right now, not only to benefit themselves, but to help jump-start the economy because God only knows Obama's stimulus is not going to do it.