Wednesday, April 22, 2009

Awaiting the PULLBACK

The futures are pointing to a lower open this morning, and while yesterday was a nice day in terms of finding support and bouncing---I think we are going to see some profit taking. In my quest to become I better trader, I am learning to flush my emotions. In the past, I would have wanted to go "all in" after a day like yesterday. I am not saying that this market can't go higher from here---just that I think we have exceeded short term expectations of many and will see some pullback. I do think that days like yesterday give us a clue that the "doomsday scenario" is now on the back burner.

What will next weeks Federal Reserve announcement hold? I don't think there is any question that they will hold rates at these historic lows, the real "meat" of how the markets will move is obviously in their statement. So how will they posture? Even though I have been screaming inflation, I think the Fed is going to discount the possibility of inflation at this point. When you look at what oil has done over the past few days (even if you are an inflationista like me) you have to say that they Fed will still keep deflation their main focus. I have been early on my inflation call and have been wrong. Several months ago I posted a question "Is being early equivalent to being wrong" We had many great responses to the question--but I have decided that being early is being wrong WHEN YOU PUT YOUR MONEY ON IT. I lost money trying to play the weak dollar and I WAS WRONG---I LOST MONEY. I have since made a few nice trades on FCX and other plays that I was looking at because of my inflation thesis.

Right now I am mostly in cash and have been trying to make a little money by "scalping" the SP futures. Today's focus will be earnings as we don't have any scheduled news that we would expect to derail the markets.

Have a question for Marc Faber? We will interview him either today or tomorrow, so get your questions in now. Dr. Faber was advocating that those buying gold do so by purchasing the physical metal for delivery when he was on Bloomberg a couple of months back. I will ask him if he still believes that the entire financial system is such that one would need to hold the "physical metal"

I am sitting by patiently today trying to exercise "caution". We are trying to finalize an interview with Mr. Sam Zell for May. I am anxious to get his outlook on commercial real estate, especially given what we heard from noted trends forecaster Mr. Gerald Celente a couple of months back.
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