Wednesday, February 11, 2009

Range Bound Or Bound to Fall?

We will post the other parts of the Mish interview tonight. Our electricity was out for an extended period of time last night and we were unable to finish producing the videos.

Many of the talking heads are saying that yesterday was overdone to the downside. The futures at this point are pointing to essentially a flat open. I had a great run in my SRS and took it off of the table. I still like it over the long term, but if you get that kind of percentage jump in a short period in this market--you must take profits.

I have one question for the "deflation" camp. How in the world can you think deflation will last very long? I saw an interesting statistic yesterday. Someone said that it took the Fed 80 years to grow its balance sheet to a trillion dollars. All of the plans yesterday will grow it by two trillion. Inflation will take hold because the wasteful spending bill is not going to get the economy rolling again.

Whether you believe Peter Schiff, Mish Shedlock, John Williams, or Jim Rogers---they all have one thing in common. THIS ECONOMY HAS MASSIVE PROBLEMS AND IS IN FOR A PROTRACTED DOWNTURN. Understand what that statement really says. It says regardless of whether you biggest fear is inflation or deflation---they agree that we are in for more pain. I own less stocks today that I have in quite some time.

I think the best advice I have heard on the show lately came from Jonathan Hoenig when he said the best way to play this market is to let the price action tell you what to buy. AND BE NIMBLE. BUY AND HOLD IS DEAD.

I think this market is headed down. I think that we will break 800 on the S&P and will head to the 750 area soon. But believe it or not, I am not shorting the market right now. I want to see what kind of support we get around the 800 level and will let the market tell me when to get short.

I apologize for the delay in the Mish interview. We will get them out tonight!!!!
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