Where have you gone Joe Dimaggio?

So its been about 8 weeks since I posted anything. Let's recap what has happened in the markets:
1. Banks are struggling to stay solvent.
2. Home sales keep dropping.
3. Non-financial earnings holding steady.
4. Commodity prices soaring.

Gee, same news from last year, but what's different? Perception. Last year we saw this as a short term blip. Now, all the pundits are calling for a "New Deal" type of legislation to shore up the system. If you let the free market react, we will wipe out the non-performers, while letiing the stronger players survive. This happens every decade and will continue in the future.

Still bullish, see new highs by end of year.

Let the Good Times Roll

Oh by the way, seeing topping of commodities trade as the small fish is looking to move from stocks to grains. Also, lots of interest in energy as well, which will make the dip buyers carry the pain. A good trade here would be to be long some indexes and short a portion of energy against it.

By the way, doesn't Chris Paul remind you of Carlton from the Fresh Prince?

What's Love Got to Do With It?

Using the top of the March lows, you can draw a nice channel for the SPX. With the top being hit today, I am looking for a quick pullback down to 1375-1395. with volatility relatively cheap for the past month or so, it is easy to pick up some downside protection for this move. I am unwinding a number of buywrites at this cheap vol and setting up index hedges. Still bullish for a summer move to new highs, but we need a little work to be done first. Financials still under performing and will lead on the downside.

Mets crush Yanks. Stop the season now.

ChartyChartCharts

Lots of nice looking charts out there. Take a peek at some transports, tech, and consumer staples names. Yes, they are all defensive, but that is where the money is flowing, so stay with the trend and stop trying to bottom tick Wamu.

Dividend yields also very attractive, combo that with call sales and you got yourself some nice returns. Thats what I like.

Moon Shot

I will say this in print, we will see new highs in the market by July expiration. Why is this? Successful retest of the January lows followed by 3 300point up days in a month. All this converging with a 40 week cycle low in the Elliot wave cycle and bearish sentiment at all time highs. If you add that to all the liquidity added by the Fed, you have a recipe for a quick run to the upside. The sell in May crowd is short right now and will create demand quickly for stocks.

Ah, Final Four, first weekend of MLB, it couldn't get much better than this.

Day Tripper

Well its been a while on the old blogger. The more things change, the more they stay the same. Still like stocks here. Cheap valuations, oversold technicals, bearish sentiment, low interest rates. Buy writes still give an awesome risk/return in this environment.

Take a look at Muni Bonds. Yielding 120% of Treasuries. History has shown this to be a great trade. We are talking 15%+ on a bond position! The market is pricing in huge defaults by municipalities, way out of whack with the risk profiles.

Born on the Bayou

Nice pullback here. We trade down to the recent weekly pivot, should see solid support 1335-1340 SPX. Took some of the nice sub 1300 buys off the table around 1380 on the Fed rip. That's what you got to do here. My strengths tend to be entry and exit points on a trade, but holding them as an investment can be hard, especially at this volatile period.

Still love them buywrites as the VIX new range of 25-35 will get you paid for selling premium.

8 days until pitchers and catchers. I only have to say one thing for the Mets, Oye come va.