It’s a little funny watching market commentators and stock analysts on CNBC and the likes. It’s like making lemonade out of lemons as these silver lining experts look for reasons that the market will continue this breathtaking run. We’re already starting to see reality come back into play.
The market indexes are weakening and looks to be rolling over on it’s side. The dollar is starting the long and irreversible slide I’ve talked about for months. The bond market (those guys are the smartest money on wall street) have already begun to notice problems with the dollar as the reckless bailouts have moved the nation toward hyperinflation. We’re also seeing the rates on Treasuries increasing daily. There is not a single event that will stop a stock market advance in it’s tracks like a spike in interest rates.
The year-to-date portfolio tracking of “Hyland Financial Option Traders” has been pretty impressive if I don’t say so myself. Here’s the list, you decide.
It comes as no surprise that China, along with a growing number of other nations is calling for the replacement of the U.S. Dollar as the World’s Reserve Currency. China, Russia and Brazil most recently has suggested instead, a basket of currencies. The U.S. became the world’s reserve currency following World War II with it’s effort to rebuild Europe and Japan. It was the only still solvent nation that remained.
“The market hurts as many people as it can as often as it can.” -unknown
I’ve heard a good deal of noise about low inflation and more deleveraging and how inflation won’t be a problem until the economy begins to recover, possible in 2010. I don’t begrudge these market analysts. They’re only trying to make a living for themselves and their families. It’s kind of noble when you think about it.
The last nine weeks have been witness to an incredible rise for the major market indexes. From the March 9th lows (S&P 666, sign of the beast) we have seen a nearly 36% moonshot advance. It’s been a great run and a lot of fun to participate in but as the average Joe investor starts feeling left out and his greed overtakes his fear, he begins to buy into the market euphoria. For the contrarian investor this is a clear sign that the rally is officially over and the small guy is about to get crushed (again).
I believe the 40% rally is over. No one believes it (yet), but that is what makes it such a compelling trade. With all the imminent dark clouds on the horizon there is absolutely no reason to think the economy is in recovery. In fact, if you believe that, I’ve got a “bridge” you might want to buy.
We don’t live in a land of fairies and elves and a 35% rise in all three major indexes (in only 8 weeks) without even a hint a of pullback or adjustment is completely out of line. Bull sentiment is increasing (never a good sign), insiders are selling, volume is weak and the overall economy sucks. Needless to say the market’s way overbought.
Portfolio update: The NASDAQ 100 (QQQQ) was closed at the open this morning for a 380% net profit. The trade was initiated on 3/12 at a stock price of 27.00. Three days after the market bottomed on March 9th.
