IndyMac Makes Another Run at a Break-out!

IndyMac appears to be trying for another break out of its consolidation zone.

Keep an Eye on it. Long Term it simply has incredible potential!

Equity Market Remain at Risk

Still no change in the condition of the equity markets.
They remain very vulnerable to a decline on an intermediate term basis.

Remain 100% Hedged to protect against a potential 10% decline in the indexes.

Long Term I remain a steadfast bull!!

Sugar - Still No Green Light

Sugar remains on the watch list for a potential buy. However it has its work cut out for it to even move into a slight buy signal. The sentiment is decidedly bearish and this will come into play once a turnaround in prices occurs. The more bearish sentiment there is in the market, the stronger and larger the ensuing rally will be.

Cocoa - A Safe Short

Cocoa is still in a very vunerable position and is a safe short at current levels.

The possability of a crash in cocoa prices remains a very strong possability.

Look For The Short End of the Yield Curve to Rally Stronger than the 10 or 30

The Inverted Yield curve that we lived with for over a year, reversed its course a while ago and now remains flat. Look for this spread to widen yet more as Short Term rates move lower much quicker than the 10 year or 30 year.

The Intermediate Term trend for Interest Rates across the board is Lower.

Demise of Crude - What is the Deal with Unleaded Gasoline???

Crude should continue to work itself lower over the intermediate and long term. On the Daily chart, it continues to work off the Triple Top and Bar the very short term rally, the price of crude seems to be destin for lower prices!

The anomaly of lower crude prices to higher gasoline prices continues, but I do not think for long. Once crude begins to decline once more then look for gasoline to really collapse in price.

Corn

Corn looks poised to finish its counter trend rally into the 408 area.
From there we should look for the grains to begin yet another leg down.

CORN IS IN A BEAR MARKET

Equity - Intermediate Term Bearish - Long Term Ultra Bullish

I wanted to quickly put things into perspective here as I have been talking quite bearish over the last couple of weeks.

On the Intermediate Term there simply is no doubt that the equity markets are in trouble and a decline is definitely brewing. This is exactly why I have hedged my stock positions.

However, for Long Term Investors this decline will offer a chance to put to use any cash that might be laying around and buy good quality stocks.

I am Ultra Bullish on the Long Term and there are several reasons, but one of the major reasons is characterized in the chart below.

As you know, the most prudent thing we can do and especially in the equity markets, is to follow in the foot steps of the commercial money and do the complete opposite of the average Joe or small speculator.

The chart below shows the red line (Average Joe) at its most bearish in years. Small speculators are very nervous and this bodes very well for the long term vitality of the stock market.

Even more impressive is the Blue Line (Commercial Traders) or the smart money. The Smart Money is Currently more bullish than they were at the March 2003 Secular Low! As a matter of fact, they are the most bullish they have been in over 10 Years!! This in a market that has had quite a rally already.

So it is very plain to see that on the Intermediate Term, Caution is warranted. However on a Long Term Basis, Stocks remain Historically cheap and the Big Boys know it. This market Long Term has the potential to double over the next 18 months!! WOW!! People have been waiting for the time when our domestic markets would start to perform as well as some of the foreign markets and it looks like over the next 2-3 years, that time will be here!

Equity Markets

The equity markets continue to flash very negative indications of direction.

I am 100% hedged as the market looks like it could take a pretty nasty tumble.

I do remain Long Term Bullish however. It just seems like the hedge is the prudent course of action here. I even exchanged out of my equity mutual fund holdings!

FORD STOCK

A very nice move in Ford stock today, but it appears that intermediate term wise, the stock
has reached its peak ability to rally.

We have a very nice 18% in 2 1/2 months on the stock and it would be wise to decrease your allocation to the stock if not get 100% out of Ford.

New Posting Policy

It seems that daily posts are starting to get a little redundant.
Therefore I am only going to post as the market warrants.

I will continue to update the short term trading model each day as well
as the quick glance Trends.

Day to Day comments on the market however will be cut back to only
as needed. I do hope this does not pose a problem for anybody!

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.

STOCK WATCH

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.

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.