No Recovery. Cover Up

Hi Fellow Trader,

Friday took back all of Thursday's gains. This would be fairly normal if Thursday's rally wasn't the first snapback in a negative trend. There are different types of trends. There is the major trendline, which would be more of a monthly chart, looking at one month at a time, and there are weekly charts, and daily. For now, the daily looks very bad, and the weekly is looking to start to look quite bad.

Questioning Authority

Here is a great article on questioning unconstitutional authority: http://tinyurl.com/yl3pfy2

No Recovery. Cover Up

Here's what Gerald Celente says: http://tinyurl.com/yhjw8da

It could be that the Us will be left behind in the world economy.

We'll see what happens. We'll trade based on the charts, and get the story as we go. However, we have to trade based on the expectations as to whether things are batter or worse than expected. That's how we trade. So, trading stocks isn't always trading the economy. If you try to trade the economy, you'll go bankrupt.

Commercial Real Estate

Stocks follow the market overall. When the market goes up you want the best sectors to outperform the market, and when the market goes down, you want the worst stocks to "outperform" the market and fall faster. Now I think it's commercial real estate.

Loans

The entire economy is based on lines of credits and loans. You probably don't know, but AIG's bailout wasn't an AIG bailout. Most of that money went to lines of credit with major banks who weren't going to get their money back since they weren't smart enough to analyze AIG's balance sheets correctly. It was, actually, a bailout for banks who made lousy decisions.

So now, what's going to happen when people don't want loans? They want to buy less? Then banks will make less money (on interest payments even though the interest itself is never created, so you have to pay from other loans). Here is the financial index: http://www.proshares.com/funds/skf_index.html

Technicals

If we have a rally for a day or two, it's not going to bother me. I think that things are starting to look quite bad. The risk is very high at the moment. If I look at SDS, it had three failed breakout attempts from the bottom since August. Now, it's trying to breakout again. I want to monitor this to see if it will follow through. If so, we might not only go short with SDS, but other select stocks. For now, I won't want to get overly excited to the bearish side. We should never be overly excited about anything, really. We trade.
Good Trading