Tuesday, December 8, 2009

Bearish Confirmation

As I implied in my previous post, the simultaneous rallies of both the dollar and equities were quite suspect... and would need confirmation. Today may be the actual confirmation that the environment wherein both are inversely correlated is still intact - as the Dow is currently down triple digits. This is a very bad sign in the short-term, because despite the good employment numbers, the equity markets took a nose dive. It may mean that the economic numbers had already been priced in during the unusual rallies in October and November (both historically bad months), and now, people wise enough to buy during those months may just be selling into the news.

I guess Santa Claus isn't coming to town.

Anyway, despite my bearish feel for equities, there are still a lot of opportunities out there since the markets are still flush with cash. The key, again, is finding the strong issues (ADX > 30).

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