Wednesday, June 17, 2009

Don't Light That Match!


Natural Gas is about to explode. Demand is low, supplies are high, so why would nat gas go higher? Two things. The dollar and money coming out of the market as it goes down may move to commodities and energy as an inflation play. It makes no fundamental sense, but it makes perfect technical sense. Also making perfect technical sense is the chart on UNG. It has clearly shown a bottoming pattern and the beginning of an upward curve. It also has passed key resistance and is bound for the 200 dma.

KRE is doing what it should be doing in times of higher interest rates. But this should just be the beginning. Interest rates have been rising for weeks but KRE is just now hitting the tip of the iceberg. KRE will be at 15 before the end of July if not sooner. Sept 15 puts look really good here.

SRS is starting to look really good again. Breaking the 20 dma resistance and onward to the 50 dma which is running close with the 20 dma. we should see a cross of the 50 dma by the 20 dma which could mean a move to the 200 dma soon after. but I still hesitate to move anything more into SRS since shorting KRE seems to be a better and safer play.

The VIX has confirmed it wants to stay above the 20 dma. I hesitate to say it but this sure does feel like a real reversal to me, not a fake one. So many technical indicators are screaming that the bull run is over. How far do you want to take it so early? Thats up to you.

Tuesday, June 16, 2009

The One Thing Obama Could Not Control

The Obama administration has done a noble job of trying to control the market via trying to show that the economy was getting better with marginal data. They are hiding the mess of the banking disaster, they are trying to make it sound like unemployment is under control, they are pumping money all over wall street. And all have worked in propping up the market.

The one thing Obama does not have control over is oil. And that is what is taking the wind out of any sails the economy has. With oil and gas prices up, it leads to less spending by individuals and inflation. The combination of the too can create a devastating consequence on the market and on the economy.

People will still buy their iPhones and Blackberry's because communication is still the essential means of growth, relationships and even survival. But outside of that and some entertainment, individuals are not going to be spending much for the remainder of the year until inflation is in check and unemployment reverses direction.

And oil has a lot to do with all of it, unfortunately.

Could It Be?

It may very well could be. The VIX closed above the 20 dma yesterday and today there is a very good chance of it confirming a change in market sentiment if it can have an up day. This, along with the SPX chart showing a breakdown by breaking through the 20 dma and the 200 dma just 6 pts away. A break of 909 could signify a major retracement.

But this could also be a head fake trying to luer the bears back in as it marches up. If not, then I find it interesting the rally came to a fizzle instead of a bang, much like the drop to 666 where everyone expected a big bang to signify the end of the downward movement. to me, that is just telling us that this is indeed a bear market and the lows will be tested and probably broken this year.

But lets wait and see before we get carried away. I am still playing it cautious with things like TBT, EEM and CAF, with just a little bit of SRS. I am short KRE and AXP.

Watch the dollar. I have to believe on any significant move down in the market, it is probably just following the dollar moving down and oil moving up

Sunday, June 14, 2009

Unemployment? Count Me In!!!

So I hear the unemployment numbers are looking good. Only lost about 400K more jobs. Only at 9.4% unemployment. Things are looking better. I heard it from CNBC, I read it on the Internet, and Mr. Obama even said it.

Well, as far as the unemployment number goes, count me in. I was just notified this weekend that our company is going to do a re-organization and unfortunately, as a senior level person, I am the odd man out due to seniority in the company. Yep, the unemployment bug got me. Bitter? Maybe. Surprised? Not really.

You see, Mr. Obama has virtually put a halt to our business. With his threats of health care insurance reform and nationalizing health care and health care insurance, our business fell off the face of the earth. Thank you Mr. Obama for this wonderful job creation stimulus package. I feel so lucky to have you as our president, creating jobs. I guess it doesn't apply to everyone, including the 15 million unemployed and underemployed. But for the 400K jobs he is going to create, I am sure they are right around the corner.

Well, I guess it gives me more time to write blogs. I will keep you all posted on my progress and how long the lines are once severance is over. In the mean time, keep believing what you want to believe about green shoots and a new bull market. For this bear, it is back to pounding the concrete in search of the next great adventure.