TOUGH CALL

The last couple of days have been wild in the markets, and that leaves us at a juncture where we could go either way. The momentum indicators at the bottom seem to indicate that we will rise, but boy have they made this a ride. We had the big Friday, the big up night session on Sunday in futures, that reversed. This sent the Bond market soaring. Then stock continued their collapse. As I stated in yesterday's post, there is about a 60% probability that those reversals continue intraday once they begin, and that did happen yesterday closing right on the lows.

Things of course looked bleak at the close, now of course in the typical way the markets fool us, we are up a good amount today as I post this. Will this last? I don't know. If you look at the chart you can see we have had 4 consecutive reversal bars, so there is obviously indecision in the market right here. My strategy today will be that if we trade through the red arrow on the screen, I will try and buy a pullback in the Russell which has held up the best. I will not chase it blindly since that is such a large move that is required to get up there. I doubt we will get there, I think it is more likely we are going to move sideways for a couple of days but you just never know. Will the markets also go to the United Nations for a resolution to direction? Of all the things the intern has done, this one has to take the cake. Refer a state to the United Nations for review of their policies. Please vote this idiot out. W would bury this guy in an intelligence test.

I have a good friend who called me yesterday asking for my opinion about the thesis of a couple of guys that supposedly predicted some of the meltdowns we have had correctly. They may well have, some people did. I got some of them right, but not all of them. One of the interesting theories they have is that you should put your money into the EURO to avoid the Dollar bubble, and that the EURO is basically the same as GOLD! Now I have heard some good ones, but that has to take the cake. Barry has weakened us considerably be it intentional or not nobody except his inner circle knows. However, we are still the world's financial leader and will always remain so. To suggest that you should run from a currency that has dropped 40% from it's highs already because it is a bubble into one that has risen dramatically and has economies that are in far worse shape than our own makes no sense at all. Where do people come up with this stuff?

To suggest that you put your money into a financial situation far more dire than our own is incredible, but also to liken the EURO to gold is just ludicrous. There is no relationship of any kind between those two asset classes. I have gotten off on a tangent here, but the reason I did it is to tell people to be careful what you read. Trust but verify, I think Reagan coined that phrase. I am not sure in this case trust even applies.