A week ago, I told you the pundits (Kass and Cramer) were telling you to buy the financial stocks: Buy, buy, buy! Unfortunately, their spell check was not working properly, and what they meant to say was: Bye, bye, bye!
If you listened to K & C, you would have found yourself on the Sirens island, abandoning all hope. Now, K& C, and many others, are calling this a buying opportunity. Are you kidding me? The technical charts are broken, and the fundamentals are devastating. Usually, blood in the streets called for contrarian action, and buying would be in order. However, the breaking of the technical charts is only the continuation of the bear market. The fundamentals, though, extremely atrocious, portend more to come. For example, further housing declines, further foreclosures, credit card defaults, auto company bailouts (maybe), and on and on.
As Karen Carpenter once said: “It’s only just begun.”
Strategy: Take profits in short positions such as financials, NASDAQ, S& P 500, and Dow, only to make paper profits real profits. Ring the bell.
However, do not, and I repeat, do not go long anything. Be ready to re-load and short again. I will advise.
Till next time,
Bill
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