Tuesday, August 01, 2006


Todays market reflects the desperation of Longs. Valiantly defending the 11000 ( Fridays low)levels on the Dow and trying to hold the S&P above its 200MA at around 1270. Valiant but foolish. Inflation, slowing economic growth, sharp slowdown in the housing market, decline of the dollar , record gas prices, slow down in consumer spending , you name it things are getting bad. The market will follow suit. You cannot artificially hold up the equity market which what is happening now. The powers that be are projecting an 'all is well' scenario while they quitely unload their positions. You do not want to be left holding the bag when it all comes tumbling down. When liquidity dries up the bids disappear and things get ugly, real ugly and real fast. Now is the time to read the data and have conviction. Conviction that things will get really bad in the equity markets before they get better.

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