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Wednesday, September 2, 2009

Market Pontifications

I was short the market big-time for months up until 8-21-09, and of course, now the market looks weak. Real traders shrug it off and move on, time for me to do the same.

The SPX retreated back to the bear trend line, I would expect Wednesday to rally somewhat. If we end with conviction down through the bear trend line, the market is looking bearish and the bull is finally dying. See chart below.

The BIG news that was of course, not mentioned almost anywhere, is China is considering reneging on commodity derivative contracts! Large US corporations like Goldman Sachs sold derivative contracts to China, and I am sure was counting on the payoff......which now may not come. This is yet another reason why all derivative markets must be formalized into an internationally agreed construct. This may rock the commodities markets as this unfolds, and yet another reason why I am not advising purchasing commodities currently.

More News
Worst of slump yet to come, says economist
Fed Will Now Monetize The Most Recently Issued Agency paper (debt)
Auto sales drop sharply with end of Clunkers program - My Spin - Is ANYONE surprised that car sales fall significantly after the government stops giving FREE $4,500.00 to buy a new car?
CIT defers interest payment, shares fall - My Spin - this company recently almost went belly up, then some "miracle money" came...and I guess went...
Citigroup sells $1.3 billion in portfolios - My Spin - Would be nice to know price paid, and if the purchaser has a relationship with US Treasury to backstop the purchase......
Credit Suisse Group AG, which downgraded U.S. stocks, prefers Japan
9 of 10 cities are forced to cut spending - My Spin - with 15% real unemployment, and state/local governments cutting back on spending, only increase spender is US Government, hardly a recipe for a new bull market.
From WebSurfinMurf's Financial Blog

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