The bears are running up commodity prices, in order to “box in” Bernanke, with his liberal rate cutting ways. That’s my latest conspiracy theory.
Look, the bear case is still alive and well. After all, the recession will be spear headed by the weak/beaten consumer, not the banks. The prospect of insolvency just scares people. But, even if they’re solvent, that doesn’t mean the market and the economy will recover.
Not at all.
The Fed is sacrificing the consumer on the alter of lower rates, in order to save a few bad banks.
Before the next leg down, I believe the bulls will give it the ol’ college try for a breakout. However, like past attempts, they will fail and eventually get rolled on by an army of 10 million seething bears.
The amateur trade is to heavily sell short here. It’s a classic trap.
After huge up days, there is always a trickle effect, as idle cash rushes back into the market and over zealous short sellers try to get flat.
Once again, wait for the market to move higher again, before re-initiating some obscene short positions.
On the top of my list is [[SMN]], [[FXP]], [[SKF]], [[SRS]] and short [[POT]], [[FED]].If you enjoy the content at iBankCoin, please follow us on Twitter