Brokers and Mortgage Lenders Dominate Trading

March 19, 2008 | Leave a Comment

Are you excited that the group leading Tuesday trade was the beaten down stocks? Oh yeah, the leadership we do not WANT.

Volume and VIX continue to show that we may not have seen our ultimate lows. The drop in the VIX yesterday tells me the willingness for the market participants to believe we have bottomed. This is very dangerous and toss in a lower volume massive rally. It only spells trouble for those who throw their eggs into this market’s basket.

The Easter Bunny is not always so nice.

Market Speculator

Volume Not Following the Rally

March 12, 2008 | Leave a Comment

Volume is running lower than yesterday’s, @ 1:07pm EST pace. Ideally, accumulation will immediately begin after the first day of an attempted rally. At the moment this market is a complete bore! It would have been nice to see volume racing higher today to begin the bottoming process.

We aren’t seeing our bottom. Why? Look at some of these numbers:

New Highs (today): 46
New Lows (today): 202
VIX: 26.02
VXN: 28.80

New Highs continue to be dominated by New Lows and VIX and VXN continue to show the lack of fear at the recent lows. During market bottoms we’d see VIX and VXN race higher with New Highs crushing New Lows. We aren’t at the point yet.

Cash is King

FOMC Injects the Market with Cash

March 11, 2008 | Leave a Comment

Here we go, Helicopter Ben Bernanke floods the market with more liquidity. I can not fathom how you can inject a poor market with more cash. This will simply prolong the downtrend, not too mention the flow of liquidity will find its way into commodities.

This move today will not change the overall downtrend, we may be getting our oversold bounce today. Bear markets will produce snapbacks like what we are seeing this morning. It doesn’t matter if it is short covering or small buying interest. What matters is the overall downtrend and we can not disrespect the trend.

Market Speculator

Keeping Your Head Above Water

March 10, 2008 | Leave a Comment

The markets continue to suffer continued pressure to the downside. There is very little of quality stocks to go long so how does a trader/investor survive until the next bull market run?

It is quite simple, Cash is King. However, most personalities do not allow traders/investors to sit idle and miss out on the action. This is quite similar to those who can not resist the urge to play slot machines when one can hear the “ching, ching, ching….ding ding ding.” The stock market has the same effect, the action makes those who can not sit idle think they are missing something. In actuality, they will miss very little.

How does one not miss action but, preserve necessary capital to play the next bull market? The very first thing is to set aside 50-75% of your capital into a 1-mo CD or some cash equivalent away from where you can spend it on anything! This restriction will allow you to keep majority of your stake. While your money earns cash rates it isn’t being lost in the market.

Posted by MarketSpeculator | Filed Under Market Commentary

All Points South

March 6, 2008 | Leave a Comment

At this point there isn’t much else to harp on here. Cash is certainly king and you should either be in cash or operating in commodities. I would continue to avoid “value” plays, the likes of AAPL, GOOG, RIMM, and BIDU. It is madness that in just a short few months stocks can become value plays? No way, do not fight the overall trend which is DOWN. We’ll experience a few short bursts of strength but will be sold. Bear markets tend to get really oversold before they become attractive to the long side.

We need the FOMC NOT TO LOWER RATES any more, in fact the Target Rate should be raised and the discount rate be made an ACTUAL DISCOUNT RATE!!! Why? It is time to flush the garbage down the toilet rather than salvage it. If you were dumb enough to buy a house you couldn’t afford in the first place you deserve to lose your house. However, I am afraid the FOMC will inject more liquidity in the market than expected. Look for commodities to continue to run.

Cash is King

Posted by MarketSpeculator | Filed Under Market Commentary

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