http://www.stockrake.com

Ok so I’m biased and feeling a hair nervous being short…heavily short, but I’m right. I made great trades this morning covering nearly every short I had on the gap down (read the recap) before the melt up. However, I went heavily short at the close – shorting the strength – shorting the closing highs. I might be wrong for a day so that the volatility indexes come in a little, but I’m still expecting severe weakness by Friday. If that doesn’t occur, then next week will likely be a disaster to make up for what should have happened this week. The market will screw people over.

Now I see on Bloomberg the futures went from +63 in the Dow to +1 back to +20 and Asian markets are coming off their highs because magic dust from the government ain’t saving this crisis from playing out. The government doesn’t create bottoms and until you people learn that (I don’t know who I’m talking too..hang on I’m going to go tell me wife that the government doesn’t create bottoms so I can get a response…), this market won’t actually bottom. Btw she said, “WTF are you talking about?”

This AIG bailout is egregious, but I really don’t want to get wrapped up in the pundit role, because it will tie me to a position and price rules the roost. If it goes higher it goes higher and that is all that matters. However, my personal feelings and belief based on what I’m seeing in indicators (aside from VIX/VXN that did qualify a bottom) is that this is not over. We didn’t even get oversold on many indicators and some are just rolling over now. Several people have pointed this out already and I don’t even use the same secret sauce they are using to smell this. No divergences, nothing. If you scrape out the 1billion shares traded in AIG today, you have a 2billion day big deal. Not enough. We need panic + time for a bottom – not bailouts.

Between real estate tanking and investment portfolios tanking, retirees are shitting their pants right now and the outflows will likely get worse and fast. When that happens and these people pack up and walk away, then it will likely coincide with a bottom. A real bottom.

Related Posts