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I know. The market is working on a follow through day... so by definition, the market is in a confirmed rally. But as I have told you, while every bull move has been preceded by this important characteristic, not every follow through day has led to a bull move. Already, we have seen a couple of failures in this bear market. The market has now experienced a distribution day... and I am just seeing too much poor action. Maybe the market just needs time... I don't know. But I do know there remains many things I am worried about... inside and outside the market.
It looks like more and more powers are being proposed for the Fed. I do not mind more regulation of Wall Street at this point. They deserve every bit of it. They earned the right to be regulated more. But from the Fed? I repeat for the thousandth time... we are now in this position because of the wayward policies of the Fed going back many years. I have been talking about this for a long time. Only now are many coming around to this theme.
How about the JP Morgan/Bear Stearns (BSC | Quote | Chart | News | PowerRating) deal? Did the Fed just become another off-balance sheet entity? Is the Fed now Enron-esque where they are now hiding toxic waste of the maniacal financial companies that took inordinate amounts of risk? The world is turning upside down!
I can go on and on... but I have to move on to the rest of my market-related worries.
I am worried when I see:
- Merrill Lynch (MER | Quote | Chart | News | PowerRating) moving up off the last financial move... and heading straight back down to the lows. What is wrong at Merrill? Lehman Brothers (LEH | Quote | Chart | News | PowerRating) is also acting the same way.
- The CEO of Capital One (COF | Quote | Chart | News | PowerRating) selling 400,000 shares AFTER the drop.
- Auction rate securities now being marked down...
- Insiders at Goldman Sachs (GS | Quote | Chart | News | PowerRating) selling shares AFTER recent drop.
- RETAILERS breaking down again off the JC Penney (JCP | Quote | Chart | News | PowerRating) news.
- Any breakouts failing.
- No new highs in the market.
- A few leaders actually breaking down? At the start of a new bull market?
The constant calls of a bottom... AGAIN. And the constant yapping that "THE WORST IS OVER!" One goober was out this week calling for 16,000 DOW in the next year. I never say predictions like this are wrong... but aren't we sick of the over-the-top calls by now?
I am just not seeing the signs that make up a new bull market. When a new bull market starts, you should start seeing great set-ups and strong breakouts. We are seeing none of this. For sure, there are stocks that are "working" and have good relative strength. But there is not nearly enough to really get markets going. Maybe the bottom is in...and maybe the market just needs time to repair itself. I have no bias.
Just not feeling it!
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