Still Watching, Waiting…
I wanted to
talk about the covers of Time, Newsweek and US News.
They all talked about the scary economy and markets. I wanted to talk about the
Arms Index which is flashing a giant buy signal. I wanted to talk about
Market Vane, which is showing a big pickup in bearish sentiment. I wanted to talk about all the dire talk about
Recession, Depression, Mad Cow, Rolling Blackouts… I wanted to talk about the three Fed rate cuts… which is
always supposed to lift the market. Yeah, right! I wanted to talk about the many
investors that now think short selling is the way to riches.
By the way, how in anybody’s right mind, did they think the Fed would cut more
than 50 basis points? Big Al just doesn’t work that way. I also would like to know
why everyone thought the markets would change to the positive at 2:16 p.m.
But I can’t talk about all these contrarian indicators because the markets
refuse to cooperate. I won’t show any charts today because skiing season is
almost over. Most growth charts look like Black Diamond runs at Vail Mountain.
Instead, I just wanted to make sure you understand that right now the market
couldn’t care less what the Fed is doing. Look at every reaction to their moves so far. All anticlimactic and all lead to large drops. I know what history
says about the rate cuts. I know what the market is supposed to do. It just
isn’t happening. Yesterday’s close speaks for itself. I lost a $10 bet. I could
have sworn the markets would finish up. Nice effort, Gary.
This column was supposed to be about intermediate-term trading. The markets are
making that impossible. But the good news is that I have been leading you to
stay in cash since Day One of my writings. Nothing has
changed.
If you must look at sectors that have stocks with decent setups, look to individual names in the Retailing
and Oil Service sectors. But like I have said many times, trust nothing, as
all breakouts have been failures. I continue to watch these setups because there
will come a day where they will start working. I just have no clue when this
happens.
One
last note: I am starting to get the feeling that the Nasdaq will
start outperforming the Dow-type stocks. This is not because we are excited with
the Nasdaq. In fact, except for the Semi-equipment, there is hardly anything
remotely resembling anything to look at — so no buying in these areas. My
thoughts are based on the fact that I believe the Nasdaq is now in the latter
stages of its decline. Hey, after 64%, the rate of decline has to slow down
somewhere.