The Novice Bear

I was watching Fastmoney and I was thoroughly disgusted and amused by the “Bulls and Bears” argument. It wasn’t really an argument given that Doug Kaas (the bear case) totally outclassed his competition on all levels. To sum up Najarian’s arguments (the bull case), “the market went up today, so this is a bull market”. After such violent selling, you would think that a professional would not say such reckless things. Hasn’t he ever seen a dead-cat-bounce?

I’m amused by Fastmoney at times but it is quickly going downhill. I don’t like the Najarian brothers and wish that the “risk doctor” would return to the show.

For the bulls out there, check out the above chart. It shows the earnings of the lower 10% of the S&P 500. Look what happened when earnings turned down in 2000. Looks to me like the same thing is happening right now.

The charts below show where I think the markets are headed. I’m going to short the hell out of them when they get there. Notice the huge volume today, which means that we will be back down there to test the lows. I think we will go lower.

Good luck!

Now today there is real panic!!!

I bought some Goldcorp call options today. I’m looking for that bounce.

I’m looking for a bounce in the next few days. If you are long, I would suggest that you get the hell out when the markets get back up to their 20 day moving averages. These markets are sick.

Here are some charts and their TDST support lines.

Today was the first day people started to really sound worried. Looks like it is time to run in all those panicky shorts in the next few days.

Incredibly, MIND has held up pretty well. I plan on riding this out with GBN and UXG, both of which got hammered today.

I’ll be looking for a long play on one of the indexes if we open down tomorrow. If we get that bounce, I’ll dump MIND and load up short again.

I’ll publish some index charts soon.

My hard drive on my machine at home died.

Oh well. I did exit my IWM put today. I purchased it at 3.85 and sold today at 5.75. Not bad.

I wish covestor would allow you to enter them as trades.

Here is a nice climax bottom forming at support for Gammon Gold. I’m showing the current chart and two previous high volume bottoms at the same price levels.

It might be worth a shot.

Here is a quote from Helicopter Ben Bernanke.

…”people know that inflation erodes the real value of the government’s debt and, therefore, that it is in the interest of the government to create some inflation.”

It was always clear to me that the government, with all its debt, would always prefer inflation over zero inflation. What has been confirmed today is that the Fed is absolutely petrified of even the slightest threat of deflation.

Rates will be cut! The dollar will be trashed! I’m betting that gold will be benefit. It won’t be because of inflation, it will be from a fear of financial collapse.

Every index has held support pretty well except for the Russell 2000. The small caps are very sick and continue to get worse. I shorted the small caps on today’s strong close.