What can we expect next week? After a 500 point Dow rally over 3 days we are starting to get oversold a bit. Keep that in mind we could see some sort of pull back. The institutional guys are back to work this week so hopefully we get some clarity in the way the market wants to go. I'm still long term bearish but can't rule out a rally until Obama takes office. Never underestimate the power of stupid people. Friday on a +250 day my SRS position was positive. A good sign for SRS but a lousy sign for the state of the CRE market. Barron's this weekend basically pumped TBT by announcing the bubble in treasuries, I'm not sure we are to the bubble burst yet the story may be good for a short term pop.
There are numerous economic reports coming out this week - Construction Spending, Auto Sales, ISM, Crude Inv, Payroll and Unemployment data. We'll see how the market reacts and just how bad(or good) the numbers continue to be.
I am still positioned to the short side but have some FAS and UYM to hedge. I will use some of my cash position to scalp some long side trades if thats where they push the market.
Bottom Line- The worst "Recession" since the Depression and people are shouting we are through it in a few short months(ok 12 but still short in the scheme of things) and telling everyone that basically we are V bottoming. Can not see that happening. At S&P earnings of 60 we are trading at a 15.5 P/E right now far from even typical bear market ranges. Unemployment is rising, commercial real estate is collapsing, worldwide demand is crumbling and banks are insolvent. But yeah we are through it all.....
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