Saturday, June 7, 2008

Our Bearish Call

On Sunday June 1st, we told you why POTC is more bearish than bullish going foward, using positives and negatives to illustrate our argument.

1) Election year;
2) GDP fails to signal recession;
3) Treasury Market sell off;
4) Extreme pessimism in the Michigan Consumer sentiment (contrarian indicator eventually).

We felt the positives were outweighed by the negatives:
1) Rising Unemployment;
2) Crude oil fails to break down;
3) Rising food prices;
4) Weak greenback;
5) Uncertainty what the June 25th FOMC decision will be, and regardless of what it is, uncertainty that the ship can maneuver through what looks like a "Perfect Storm".

Friday's surge in umemployment and the dramatic increase in the price of crude likely combined to signal the beginning of a new bearish phase and a retest of support on every major index. Exhibit caution on the long side, look for trades on the short side.

1 comment:

Anonymous said...

If crude continues its climb, market may not recover for many months, great blog fellas.