Wednesday, June 28, 2006


Well I am back to blogging. Its been a couple of tough months . Been moving offices, traveling as well as busy with other side projects. I have made a promise that I will try to update my blog atleast once a week from here on forth.
Alright now back to the markets and my outlook. Ok so I don't exactly have a crystal ball. At one time last year I envisioned oil prices falling back to $30 a barrel. I admit I was dead wrong. What was I thinking. While I do not think we will hit $100 anytime soon, I do think $50 is the lowest we can go over the next few years. I was listening to a report in Economist suggesting that there will be an oversupply of oil around 2010 which may ease prices perhaps even into the $30 range. The reasoning behind it was growth in China and India would not be as rapid as it currently is as well as the growth in popularity of cars consuming low amounts of gas.
The current equity markets suggest we have entered into a Bear market. Yes the Big Bad Bear is finally upon us. It was inevitable considering we have had a long running cyclical bull since early 2003 and the last bear ended end of 2002. You can expect a bear every four years and on cue its here. Time to cut out the longs and short every rally. As can be expected I am currently heavily in cash - almost 70% . The rest of my funds are selectively shorting securities that have broken their uptrend and are falling below levels of support like 50ma or 200ma. I expect this bear market to last till atleast September though it may go on till early 2007. We may get a light summer rally but do not count on it. As we speak the bear appears it is setting itself up for a further drop down. I do expect the Dow 10,000 level to be breached and we may even see sub 9,000 on the Dow. Nasdaq will breach 2,000 per my expectations and S&P 500 could fall below 1100.

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