"Drink Up. Storms a Comin'. "

The best way to describe the stock market, especially financials, housing, and tech, is with this analogy...

The storm clouds are gathering, they are getting darker by the minute and EVERYONE who has a brain knows that it is going to rain. Probably hard with lots of wind and lots of rain and for who knows how long. Job losses coming out left and right. Consumer confidence dropping. Inflation going up. Housing declines still accelerating. Trillions of dollars bound to evaporate from the global economy before this is all done...

Yet no one knows when the clouds are going to burst so what are you going to do... hide in your bunker when it's still so much fun to play outside? You can if you are a private investor but if your an institutional investor it's NOT ok to tell your clients that you are in cash because you are scared and you see an epic storm brewing when the other funds are going up... when the SP is going up...

For the big boys they've decided how they're going to play this... by partying like it's 1999 but always keeping one eye on the nuclear bunker. That's right they'll find a sector that looks safe (oil and AG and commodities recently) and play it until it's overdone and then get the heck out and have another place to hide for the moment. Find another tree to hide under so to speak. They'll come up with a reason to go into that sector... the rebate checks are coming out, the fed cuts take 6 months to work so in 6 months from now we'll be on the rebound and stock markets always look ahead, the global economy will decouple from the rest and therefore technology stocks that sell overseas are good plays... whatever... it doesn't matter... as long as it isn't raining yet and as long as everyone is on the same page (like a fraternity... now we're going to move out of oil and as long as we all do the same thing we will be fine)...

When BSC went "bankrupt"... actually they were "profitable"... at least compared to others in the industry... and almost met expectations! but just couldn't get any money because the were teamed up on with rumors and lies which made it so they couldn't pay their bills... just like you couldn't pay your bills even if you had a decent job but your bank account suddenly froze your funds... but that's another story...

The point here is the rain drops fell that day, the big boys were all ready to head for shelter and the futures showed it before Ben came in and "saved the day". The stock market would have crashed hard and long and it still likely will eventually in my opinion which is why everyone needs to always have an exit strategy in mind...

That being said... until the raindrops start falling on our head do as Trader Mark (on my blog link... A U. of Mich graduate) does and "Drink the Kool-Aid"... it can taste pretty refreshing and you can't argue with the charts on financials and some techs right now... just be ready to dump the punch bowl and run at any moment...

Here's Dane Cook on ze Kool Aid Man...

Oh and by the way I sold some of my DUG position a bit under 34 when I saw that it had gone up to much too fast... "profits". You have to take them in this market. I may add more depending on conditions tomorrow including CVX report. I stayed away from UYG. It's true that money had to flow somewhere and the charts were set up for it but I know the underlying rot and I just couldn't get myself to drink enough of the kool-aid on this one... for those who could ignore the truth enough you did very well... however the 100 day EMA was NOT breached (fell just short)... if it gets taken down with volume I will get into UYG or perhaps GS.

Unlike technical plays like UYG, AAPL, and others SDTH is a technical mess right now. But I had to start building a position at 7.55. Are you kidding me? It is trading at the same level I got in during October and it has between 50,000-100,000 (depending on how far the second expansion has come along) more NPCC capacity then it did then, it has a 20 year patent for its proprietary technology, it developed NPCC for polyethylene... plastic bags... which will grow insanely in Asia in the coming years regardless of the global economy, international growth coming on line, the best technical support team in the industry, a great R&D team that is constantly looking for new ways to expand NPCC use, proximity to huge, cheap, limestone quarries that Nobody else in the world has... I can go on and on and on and on... and it's trading at a FY PE of under 14????

I hope this technical mess goes to it's next support of 7... people are nervous in this stock and it may... they report on the 7th...

This blog is for informational purposes only. It does not give investment advice.