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Friday, June 26, 2009

Did I proclaim Bear Market too soon?

I posted back on June 17th that the Bear is back! Today the market rallied right out of the bear trend line down, threatening to reverse.

Couple of points from my perspective
  1. Today's counter rally was driven by a mix of government news/media games, European monetary action, politics (Ben Bernanke testimony) but NOT by fundamentals. Downtrend could resume shortly
  2. We are in a bear market, hence the over-all trend is down
  3. The market could reverse, hit 960-1,000 SPX before reversing again.

If this is a reversal back to SPX 960-1000, and that reversal hits it's peak somewhere around July 15th, the fall will be disastrous and with depth. A failure of this counter rally on top of a 39% rally in 7 weeks would be with extreme force.

For my bank account, for my own sanity, and for the health of this country I hope the market will resume the bear trend down to SPX 810 area, then bounce.

In all events I am prepared to do what it takes to trade somewhat out of my positions to protect my bank account, so I can double up in the event we hit new highs in mid July. For now I will take it day by day. I have said before, nothing moves in a straight line and 2009 will be a horrible year to trade stocks.

Also in the news, there has been 14 weeks of significant INSIDER selling of stocks. Translation: CNBC says it is a great time to buy stocks, but the executive members of the US corporations are selling as quick as they can.

I am betting the insiders know more than the public spin machine.

Gold miners are doing great, as GDX and miners rally. I added to my positions on Tuesday, but I am holding off on loading the boat until this market decides direction with conviction.

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