Up, Down or Sideways?

• Posted by Howard
• on January 4th, 2009

At market tops and bottoms, no bell is rung. Do not expect to find one here. When push comes to shove, price action rules and although we are not going down these days, I see no real reason to get long.

Here is what I continue to see:

1. All-Time Highs – Drizzle

2. The best growth companies from the last bull market – Apple and Google – which other than stock price appear to have strong brands, balance sheets and business models, are still down more than 50 percent from their all-time highs. Yes, Steve Job’s is likely sick and yes it is material, but how can you not own this stock if you are even remotely bullish (I own both).

3. The global governments have no clue what to do with the banking system and failure is around every corner .

4. The boo birds are all over Venture Capital .

5. It seems like everyone wants the major market averages to go straight down to zero. If you follow the markets you know that they never do what everyone wants them to do.

6. The internet sector was down 52 percent last year , and Google was an UNDERperformer in the index. I must be dumb heading into 2009, because it is where most of my money flows.

7. The market has been shrugging off a shitload of bad news recently .

8. Retail is a clusterfuck

You get the drift…it is pretty hard to build a bullish case other than the fact that the market is not going down.

I like to look at very long-term charts to get a feel for things when the noise is deafening. The noise truly is deafening. (Click on the charts to enlarge them)

There is no doubt that the world looks like it has come to an end, but by all historic measures, shorting the market right now, seems a tad rushed. That said I am short the Retail Index (RTH) some Best Buy and Capital One.

If a bottom is at hand, lot’s of new names will emerge in the year ahead to make your year. If we continue down on Monday, there will be many momentum shorts to catch.

Investing is a marathon, not a race. There is nothing wrong with cash. Opportunity is the name of the investing game and there will be easier days ahead.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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