Yes they look terrible except that Warren Buffet
appear to keep discovering value. The
truth is that the USA is setting up for a great bull market run thanks to two
underlying business realities.
1
Obama’s abject failure as an economic steward will
end in two years and this means two more years of forced consolidation and increasing
underlying strength. If you sit on the
bid long enough, you will be massively rewarded.
2
The USA is transitioning fast to a positive balance
of payment thanks to the revolution in oil production. This means that his successors will find it
much easier to sort out the general economy.
3
All reforms now are bullish and the new president will
have a mandate to implement reform regardless of who it is. Hillary for the Dems is likely to be an
informed reformer at least. Anyone for
the Reps will be a reformer. So the
choice will be reform or reform supported by an aware electorate.
Money is cheap and massive capital investment in
energy in all sectors is well underway.
Infrastructure is also likely to catch fire.
Time for Investors to Hunker
Down
by Dan Dicker
Washington DC (SPX) Sep 09, 2013
It's time to step out
from my 'normal' role as the 'energy expert' and make a comment or two on the
markets in general, just as a professional trader who's seen quite a bit in his
almost 3 decades of daily experience with capital markets and the way they act.
Patterns emerge that aren't foolproof, but they've served well over the years
and they are making some very visceral noises to me, even observing the action
at longer range on vacation.
Here's something that
won't be news to you - the markets look terrible.
It's not just the
fundamental information that most of the 'regular' equity analysts have been
filling you full of on every media outlet around: There's the lowering of
expectations on earnings, not just the disappointments of 2nd quarter results
(which were uninspiring).
It's not just the
continued bad indications from the emerging markets, whose growth rates
continue to be guided downward. It's not the continuing bleat of 'taper talk'
which (for those who believe this has been a totally fed-inspired rally) would
be a total death knell for stocks.
You don't need me to
point out any of this.
But here's what I see.
There's a stock market that continues to ride the lower edges of some usually
reliable technical indicators, like the RSI and Stochastic, usually a good sign
for a technical rally. There's a market that's felt extended but now looks more
like it's really rolling over, and not for any short-term of a few sessions or
weeks, as we had earlier this year.
We've got a bond market
that may be even worse than equities, and is riding out into the sunset on a
wave of panic, with very few analysts interested in buying. And we've got a
pick-up in some of the most 'left-for-dead' commodities that were never
supposed to come back, including copper and natural gas, up above $3.50/mcf
again.
Every stock rally looks
like it has to be sold and Gold actually looks like it should be bought.
These are not good
signs, folks. These are the signs of a market that has put in it's best values
for the next several months and has a best case scenario of moving sideways for
the rest of the year, if not into the first few quarters of 2014.
But, where can you go?
As an oil trader, I've got no problem being short commodities, but a lousy
track record being short stocks. That's why I've advocated collecting premium
wherever you can by selling calls either in the money or slightly out of it on
most every issue you own in stocks.
With your commodity
exposure, I still maintain that most of the risk remains to the upside and the
strong correlations between oil and stocks are slowing breaking.
In very, very unique
cases, I might look to buy something undervalued, but it would have to have
been undervalued for years, as the miners have been or perhaps inside the
natural gas space. Over the last few columns, I've given you some ideas here
and I'll continue to do that when appropriate.
But for now and into the
near future, I'm hunkering down.
The market action just
stinks.
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