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.

Positives:
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.