Here is my call going forward,
New lows wil be made thsi year from this date. There will be no Summer rally but a Summer tank, and there will be no 2nd 1/2 recovery like the pundits and wall st media hype is callign for. May starts the Dow's historicaly worst 6 monthes of the year, and June starts the NASDAQ's worst. So if you have thought that you have seen the bottom liek everyone and there great aunt from Chicago... ahh.. Mogul says you have not.
I am not revising my target at this point as we still have to hit my call..which wil happen. Then i will revise lower on the indexes..but lets make my first targets first.
Short Term-
Currently the Fed is still in ease mode and we are tailing out of earnings where we will then sell off. Earnings for Q2 should be even worse then Q1 so earnings warning period ahead in the next 2 monthes will plauge the unsuspected yet again. As for the Semi's they are more expensive now then back in January, due to revised lower earnings..not to mention they have no guidence and it is my beleif that Tech Slowdown May Outlast the Inventory Correction, where they see a bottom, as i do not.
As for the consumer, I find the RESILIENCE OF US Retail Demand Surprising..I don't think the country who day in and day out don't have a firm grasp of what is going with the world around them understands the seriousness of what is looming. Yes, they will get a tax cut and yes they will be using it to pay higher utility costs and higher living expenses. A recession is nowhere near priced into this mkt. in my humble opinion. The fact remains that in post war history, when energy prices rise as much as they have, each time has led to a recession. The days of act like a ostrich and put your head in the sand, as what i can't see can't see me and can't hurt me is a pathetic stance. People are losing there jobs on a grandose scale, larger then i have ever witnessed in my lifetime..where will they all find work...
As, for the US dollar..it has been very resillant..but it will now be time for it's true colors show..truth is the fed did a whimsical thing cutting rates (and will continue to one of the lowest prime rates in many decades), not only will this hurt the US dollar but it wil hurt trade and make forigen money flee, the amount of money supply they are creating is absurb..all this to make the US people feel everything is ok. Second, suffering business are already tapped out fully leverged and facing extreme financial opposistion and inventory. Can you imagine when it comes the tiime to actully raise rates... nothing goes down forever...
Any forgin financial crisis will seriously affect us banks, and it is my beleif that institutions like JBM and BofA, will suffer greatly..not to mention all the others..
I wish my onlookers to tread caution and do not risk capital, until there are signs of a recovering economy, which is currently far from in sight, contrary to popular beleif.
I will be updating the call in due time.
All the best,
-Mogul |
