3 things I want to see in this market

Hey Barrons! Do not, I say, do not ever put
Paris Hilton on your cover ever again. I don’t know her…and I
don’t care. I am sure she is a sweetheart. I just don’t want Paris Hilton on
the cover of Barrons.  

 

For all of you who do not eat, do not drive, do not use electricity, do not
pay for home insurance, do not pay for health insurance, do not travel, I have
good news for you: THERE IS NO INFLATION!

 

Gretchen Morgensen of The New York Times knocked it out of the park
again. In case you did not know, she is one of the most astute and best
business writers on this planet. You must read her thoughts on the REFCO
debacle from Sunday’s paper. Speaking of REFCO, where the heck was the due
diligence? How the heck were they able to go public? Methinks some investment
bankers, lawyers and accountants were more worried about their fees than doing
their forensic work. Methinks this baby is going to have legs and many heads
are going to roll. Kudos to the regulators for jumping all over this
nightmare. I am hoping  the IPO is scrapped and all investors get whole. But
that’s asking a lot. 

 

When are we going to have time to listen to all this music and watch all the
video on the IPOD?

 

USC/NOTRE DAME…WOW!

 

REGGIE BUSH…WOW! Is there any way my Giants can pick this guy up?

 

PENN STATE/MICHIGAN…WOW!

 

OK…the market has now started to bounce. It was due just based on how
extended to the downside many stocks, sectors, and for that fact, the market
was. But once again, I must tell you to concentrate more on the forest (the
longer-term deterioration) than the trees. (the bounce) I am already, after
just a small bounce, hearing too many bulls coming out of the woodwork. On a
sentiment basis, you would rather see doubt on any bounce. Just keep in mind,
if this was to be some sort of strong bottom, you do not have to rush in. The
damage has been so big and widespread, it will take time to build new bases
before the start of a good leg up from here. Also keep in mind, that the
recent highs continue to be strong resistance…and they are only a few
percent away.

 

 

The SOX
(
SOX |
Quote |
Chart |
News |
PowerRating) continues to act poorly.  On Friday, it actually felt  like it was
going to continue its recent bungee jump but was held up by a bouncing market.

 

UTILITIES are still on the defensive as longer-term rates have spiked up. Just
like I said about OILS recently, I would not try to catch the “falling knife”
right now as the big money is selling this group.

 

OILS had a nice reversal to the upside Friday after becoming very extended to
the downside. I want you to recognize for the future about what just happened
to these stocks. At the first sign of decent weakness, the hot money crowd
headed for the hills…thus the big drop. There are no bases to buy off in
this group. If OILS are to turn up and continue their bull market, I suspect
there will be plenty of time to consolidate first before making any move.