Back to mostly out, cutting losses as I had to to get here again. My sell call seems to have been right, and soon will probably be the call to get short (which I might already be late on).
Looking at this reminds me of last summer and a few other "corrections" that head-faked me horribly, only this time with no magic September rally in store I think.
We are seeing buying on the dips still, which is why we're not just going straight down -- but those guys (and I fell for a little) are going to be so burned that they'll stay out for awhile. Seems the market is finally pricing in the end of QE for real. And one pundit, who I'd love to give credit to if I remembered which one had an interesting take on this.
QE ends. Market tanks -- no surprise. Bonds go up (yield down). Investors flock to those "safe" bonds that are going up. Ben quits buying them at end of QE, but now we have external demand for them, so he gets off the hook, which he wants, obviously. So as long as the markets don't tank "too bad" and bonds don't go down "too much" -- the fed "pulled it off", kinda-sorta, and gets buyers for our ever increasing debt -- congress lacks the balls to really cut squat, so long term -- we are toast. When the entitlement programs are figured into our debt, we're worse off than Greece by far, please note.
All currencies are in a race to the bottom, more or less, but the buck may take second now and then (now) as the reality of the bailout failures for everyone but large financial institutions takes hold more publicly, and they're not doing so well -- they'd mostly be insolvent with one FASB rule change that required mark to market again for their bad holdings.
I'm not necessarily calling the dreaded "double dip" right now -- but it's a definite possibility. Real estate has farther to go down before it becomes real again. Many of the jobs lost are just plain lost as companies have figured out it's better to only keep the better workers on board, and not re-hire the ones they've laid off -- seems they chose well, as their productivity without them is still at record levels and going up without the losers - and yes, I know that's utterly politically incorrect. Just correct, which I'll settle for anytime. I see what shows up when I look for workers here....ugh. And when I try to hire good people -- well, they're just busy now. Tells the story, right at ground level, no faking that one. Losers are readily available, good talent not so easy to find.
That 100% recovery on the markets since Mar 9 at the big bottom? Against Gold -- 4.5% or so, I heard quoted today. I'd have to check that (sounds worse than I think it is), but....look at things priced in say gold or oil, and see for yourself. Asset inflation is sure good for the tax collector, even if it doesn't actually increase your purchasing power.
So, my call right now is look for good shorts....but look, don't buy into what isn't really established just yet. For the more obvious ones, SNE, LNKD and such, I'd wait a little longer since the middle of those possible moves is still before us and they might give a better entry first. There's little point in my mind shorting the indexes, even though they might go down some more, because of the nominal dollar-problem there -- you still have to pick "best of breed" or in this case "worst loser" to do better than simply betting against the buck and breaking even in purchasing power. And by betting against the buck, I don't mean against some other fiat currency - I mean in real things instead, as every printing press on earth is running overtime it seems.
Retail sucks now -- because all the bucks are going into gas tanks. China looks like cooling, bad sign since they were all the fresh demand at the margin driving commodities higher. Rough seas ahead, matey. It's beginning to look fairly nasty out there -- the squall lines are on the horizon. Sure, it could just blow over (again) for awhile but the storm producing patterns have not changed one whit.