Thursday, May 10, 2007

Commodity Watch

Cotton continues to look bullish.

No question that Gold is looking very weak!!
Downside is a real risk here.

Appears to be trying to stabilize in here. Could very possibly be nothing more than a rest before the decline resumes!

Intermediate and Long Term Trends have both shifted to DOWN!!

Corn took out the lows today and also closed below the 200 day moving average.
Both of these could really cause the price to accelerate to the downside.


Commodity based stocks could be in trouble here, long term!!

Gander Mountain looks like it needs a rest after quite an impressive move. There still is quite a bit of push left in the stock!

Very Nice Sell Signal on Dean Foods.
Might be time to look for a Bottom.

CSV has some excellent upside possibilities!

Equity Market Comment - HEDGE YOURSELF!

It appears that the equity markets have finally entered into a corrective pattern and quite honestly with all of the negative divergences it could be quite nasty.

I have a Hedge in place and will keep it there until the picture becomes clearer about if this will be just a correction of the rally off the March Lows or if this will be a correction of a larger magnitude.

Myself, I think with the Yearly Model calling for the High to come into place on May 8th and the model clearly remains down until late August, it seems to indicate that we are going into a prolonged corrective pattern. However, I will let the market tell its story and simply follow what it is telling me.

Wednesday, May 9, 2007

Crude Oil and Unleaded Gasoline Futures

The Petrol Complex could get very ugly to the downside pretty soon. I have sold off all of my oil and gas related stocks except for a couple of very strong utilities that I have owned for over a decade.

IndyMac Bank

Much like Corus Bankshares, IndyMac offers a tremendous value at current levels and a very nice dividend also.

The stock short term also has a short squeeze opportunity and could rally sharply as the shorts are forced to buy back in!

Corus Bankshares

There simply is no doubt about the fact that at these price levels, Corus offers one of the best values on Wall Street today!!

Abercrombie & Fitch - Update

We had talked about Abercrombie a couple of weeks ago and I was discussing how negative the stock is looking. It bears repeating here as nothing has changed and a definite hedge should be put in place on this stock as the correction could be 30% or more and why should we give up so much of our gains when their are strategies to help us to avoid such pitfalls.

10 Year Note

No change here either, as the 10 year note continues to look like it wants to rally.

Although there was quite a sell-off in the note on the FED decision, the intermediate term continues to call for higher prices and lower yields.

Equity Market Overview

No real change on the Condition of Stocks.
On an intermediate term basis they remain overbought and over-valued.

To keep this market healthy Long Term, an Intermediate term Correction would be just what the doctor ordered. A correction of 7-10% would be ideal.

Tuesday, May 8, 2007

Gander Mountain

Gander Mountain continues to rally strongly off the W bottom it made. It has since, satisfied the first upside target at $16, but with all the shares that remain sold short there is plenty of fuel for the stock to continue its rally!!

10 Year Note Yield

Rates continue to look like they will work lower for a while here.

I continue to look for the rates on the 10 year note to take out their most recent lows and perhaps then some.

Equity Market Comment - HEDGE IN PLACE

It is extremely important at this point of the rally to emphasize the wide spread negative divergences the market is putting forward, both on a daily and weekly basis. It is these divergences along with the current bullish sentiment and the inability of the short term model to get into a buy signal area even as the market moves higher that has made the intermediate term look very weak and negative.

Long term I remain extremely bullish, but intermediate term the equity markets are ripe for a substantial correction. A correction that is substantial enough to put on a defensive stance by hedging our long positions.

Please notice I have placed a sentiment chart showing that the current bullishness is the highest since early 2004, which preceded a sizable correction.

It is also important to note that the forecast model for the market shows a high being put in place on May 8th, which is today and a low not being put into place until August 24th, so keep these dates in mind as we move forward.

Updates Will Be Resumed As Of Today

My apologies for no advance notice on my absence.

I took my beautiful wife out of town for our anniversary and one of the conditions was for me to leave everything behind and live our lives like we were 20 again!

It was Great and it was a much needed recharging of my batteries.

I will be updating the blog tonight and there is quite a bit to cover, so please stay tuned!!

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