Hi Bob,
I'm still short. A close below 6.50% in the cash 30 year bond will stop me out and I will then take long positions. I can see the argument for rising rates and the argument for falling rates. So, I'll just let the market tell me what to do. In the meantime, I will stay short. There's alot of short covering into the labor day weekend, shorts don't like holding positions over a long weekend. The flight to quality, I believe, will eventually turn bonds higher, but I need market confirmation for that.
I will also stay short the SPU7 into next week. There is typically an up pulse in the stock market during the first few days of each month when funds buy in with new cash from worker paychecks that contribute to funds monthly, but I like to ignore the zig zags and stay with the trend. The cummulative advance decline is clearly negative. The trend is down and I am not a bottom picker. Bottom pickers will continue to get stopped out as the market makes new lows. A close below 7600 will be the final death blow. I don't expect a sudden crash, just a gradual errosion of prices. If it went down 75 points a day for 100 days, it would get to zero. I'm not expecting that, or hoping that. Just a slow, gradual bear move that claws as it goes.
The market may rally, but each rally will eventually fail. Look at the other markets in the world, Japan has already started its slide two months ago. Our next stop is 7200 with an eventual decision point around 5500.
I don't know what happened in the 50's. I was a little brat eating candy and going to the zoo alot.
Enjoy.
GZ |
