DANGER: The Market Rally is At Risk Again

Commodities are being liquidated. This will have a profound effect on commodity related managers, fools like Jim “the bowed tie” Rogers.

But put that aside for the moment and fix your eyes on the 10yr bond, getting hit again, barely up now.

Click on chart for live quote

I was very close to buying SOL and WETF, but have put off new buys until I feel comfortable with the bond market.

Aside from the fact my algos nailed the bottom to the exact minute with a timely OS signal, my Risk Appetite Index is bouncing–led by Cali munis (PCK).

Caveat: there are many bottoms and this run is likely to putter out and fizzle out. There are ranges to trade and comfort levels to consider when allocating resources. If you feel uneasy, as I do, make it a spectator sport.

TLT is lifting off and precious metals are getting the business again. This rally should stick, AND MORE.

Oddly enough, many stocks that are on my ‘to buy list’ are down today, creating room for opportunity. The question proposed is a very simple one: will the rally last? If so, there are good buys out there today. If not, I am better off eating hammed sandwiches.

As you know by now, my investments have been condensed into just a single security: IMMR. The rest of who I am, what I am, is in cash.

I haven’t stepped in with buys yet, due to ‘deer in headlight’ syndrome.

Still watching.

NIKKEI is off by 35 and S&P futs are -5.5.

Both Japanese and Australian markets are off to the races. The Koreans (extra Ashley Schaffer) are tracking a close third.

On the home improvement front, my landscaper is at war with my arborist over a tree planted close to the house. He also states: “the idiots messed up the planting of another tree in the back”, which will result in “surface roots” because “that guy doesn’t know what the hell he is doing.” Moreover, he declares “the god damned wood chips from the stumped tree should’ve been removed from the turf.” Furthermore, he declared: “no grass will grow here, ever again.”

Stay tuned for Battle Landscaping at The House of Fly tomorrow, as the arborist is scheduled to make his case around noon, in the flesh and with convincing rebuttals.

According to Trim Tabs, more than $60 billion outflows in bond funds were reported last week.

The last time consumer confidence numbers were this high was in January of 2008.

Buyer beware.

Still 65% cash.

NOTE: This is why CHINA SUCKS.

The best sector is solar, with gains in SCTY, FSLR, RSOL and DQ. ASYS has been melting up on a daily basis too.

About 75% of stocks are higher today, bucking the trend of rates. As you see, TLT is lower for the day.

Regional banks are outperforming again, as managers allocate into names that stand to benefit from higher rates. Names like HBAN, SBNY, CMA, FITB, ZION and TCBI are accelerating to the upside.

Although tempting, I’ve opted to not chase the market today. I might regret it, since we have lots of upside potential if the current panic turns out to be bogus. But before I can buy, I need to see TLT higher–plain and simple.

It’s worth noting, Dry Bulk rates shot higher again. I know some believe they’re rising due to chinese iron ore demand. But I still believe the core reason to ever own a shipping stock is based upon the premise that ships will be scrapped after bankruptcies are declared. Tighter credit could decimate the shippers. I haven’t bought back the FRO shares that I sold because of higher rates. They need to refinance by 2015. The clock is ticking.

It’s frustrating to watch TXTR melt up. I had an in on the name and never bought a share due to the low volume.

For now, I am still focused on IMMR and will be waiting for the cocaine party to break out, hosted by The Gimp, to get back into risk.

Oh, as for the losers, gold and silver, again. What else is new?

As long as yields are rising, the market cannot be trusted. If the 10 yr bond hits 3% there will an Exodus out of stocks into bonds.

I like TXTR, USG, WNR, APO, HOV and BZH. But, unfortunately, I am nothing more, or less, than a spectator for now.

On paper, this rally should stock. Durable goods came in better than expected. Some Fed official made some dovish comments and LEN posted much better than expected results, which should give a boost to one of the lynchpins of this market: housing.

But TLT is barely up and if we see yields rise again, the rally will dissipate and bulls will be crucified. If you get that 10 yr close to 3%, you will see a bonafide panic, former greedy gluttons liquidating their accounts before they hit zero.

In the event bonds should rally alongside stocks, I am a buyer of USG, HOV or BZH, AMBA, WETF and maybe some WNR.

Let it be noted, however, I am skeptical.

UPDATE: TLT is actually lower on the day. I am avoiding all stocks, leaving IMMR to be managed if it dips. By managed, I mean buy more.

First I want to tell you that when I type in the phrase The PPT it auto-links to the product page. My IT chief fixed that up. I’m not here whoring for new business. Secondly, iBankCoin is not venture capital funded and I couldn’t care less about getting new members for my algorithms, since it represents a minute part of my overall income. Unlike most of my competitors, I have my own money and do not depend on anyone but myself.

Having said that, I cannot trade with The PPT and offer you looks behind the paid wall, not necessarily to lure you into out inner-sanctum, but instead of show you what I am proud of. Think of these posts like a father showing pictures of his son hitting a grand slam in the world series and fondling a famous actress at the same time (no Rick Ross).

Since late 2011, this market has been going straight up. From 2009-2011, The PPT would regularly post Hybrid Oversold signals, which gave me an incredible edge in the markets, considering their extreme accuracy. But something changed in late 2011. Perhaps it was QE, POMO and Ben’s beard. Volatility compressed and stocks took a methodical ride higher, until now.

After the close of trade, the very first Hybrid Oversold signal was registered by my algorithms. The score hasn’t been this low since November of 2011. The result should be sublime. However, the process, as always, is scary and nerve-racking.

Nonetheless, I must adhere to this signal. I may not go on a buying spree tomorrow, but soon.

Here is a brief look at some of the previous OS signals and results.