Tuesday, May 5, 2009

Taking Some Profits

One thing volatile markets will teach you is to take profits. We have seen some nice gains in the past few sessions and one would be crazy not to cash in on some of those and reassess things. Currently the futures markets are down slightly and we could have a pullback in the near future.

I had a great interview last night with Nick who is the Chief Strategist at inthemoneystocks.com. The full interview will be posted tonight. He thinks this rally is making gold an awesome buy and I agree. I had been content to wait on the gold trade, but when you hear Nick talk you will understand why I am re-evaluating the gold trade.

Did you see Natural Gas and Coal prices yesterday? I think my inflation ideas are about to come to pass. Many will argue that the banks are headed right back down and that will have such and impact on consumer confidence that we will see the entire market tank again and then we will get caught in another deflationary spiral. I am not sure about either, but do know that the money multiplier has been below 1 and when it rises we will have inflation. The banks haven't been lending and this stress test may cause that streak to extend for a while, but at some point they will want to lend again.

I plan to watch the market today. If we break 889 on the S&P we could have a down day to about 873. The Nasdaq has been the leading market this year and if the averages weaken this morning, I would consider buying the QID. These markets appear to be overbought in the short term and QID is a great way to play the downside.

Futures seem to be getting weaker as I type. Full interview with Nick will be posted late tonight.
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