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No, this isn't a post about SBUX; it's written at Starbucks, in Auburn, California (one of the frothier areas of real estate speculation).
This will probably be my final post of the day, since a day of continuing the journey home and unpacking awaits me. Plus I have to decompress from this insane week, and this particularly insane day.
I remain largely short, although I've gone long energy via USO and I got out of my /ES shorts (only to re-enter a position half as big during the surge to 775). I will leave you with this custom Slope of Hope artwork and continue on my journey.
I'm typing this as 70 miles per hour; luckily, I'm not driving – – Mrs. Bear is. We're in the throes of a crazy day; the Dow was down over 200, well under its November 2008 lows, and now the bulls are fighting back. People were freaking and rushing into gold during the plunge, and now gold is softening up.
Again, there won't be another post until late tonight, but I just wanted to acknowledge the insanity and take advantage of my cool little wireless Internet card.
Well, my vacation is over, and I need to pack up and drive home. I probably won't be able to do a new post until late tonight, and even that will be a short one, so there will be hundreds of comments amassed by the time I get back to Slope.
I am typing this four hours before the close; I have taken handsome profits on a variety of symbols including CL, CRDN, OXY, PX, ALK, AMG, ARLP, CNI, ITRI, NHP, STT. I have taken smallish long positions in SSO and /ES with tight stops as a hedge against a rally later today, but on the whole I am (obviously) still positioned very short.
Having gone through all my charts (swiftly), I have determined I am comfortable leaving most of them in place, and I will tighten up stops for the umpteenth time this weekend.
My boss is a very well-read person, and he, like me, is a fan of history. Sometimes in the wee hours of the morning, he and I will kick emails back and forth musing about books we are reading or what we think is happening in the markets, and I wrote him an email today I thought I'd just make into this morning's blog post (lazy, aren't I?). Here goes:
Well, this probably comes as no big surprise, but I tend to view history
through the eyes of charts, and my speculation about the big moves in store for
the equity markets are aligned with what I also think will be those political
shifts. Something like these lines:
Wave A: (what we are almost completing, from January 2000 through some
point in 2009) measured in true dollar terms (e.g. gold), a sweeping plunge
in asset values, providing the government an opportunity for core changes in
civil and economic liberties and, as we approach the end of Wave A, a strong
anti-capitalist sentiment and the stepping-up of wealth-redistribution. We'll
just say for now this terminates with S&P in the low- tomid-600s.
Wave B: Hearty and sustained
countertrend rally, providing widespread relief to asset prices and a general
return to normalization in business. This will be a period of time when people
will say to themselves, Hey, this is working! Obama's popularity and power
will increase, since it will seem his policies are having positive effects on a
wide scale; he will thus push through even broader changes (surely nationalized
health care will be one of these, in additional to a nationalized mortgage
market and banking system).
Wave C: Now here is where it gets really interesting. The trillions of
dollars poured into the system to save it come back to haunt it. Inflation
starts appearing, and it becomes a runaway train. The market re-collapses,
and Obama gets swept out of office by someone even more politically extreme
(not necessarily the classic liberal extreme, but perhaps someone far more
dangerous). This will probably be the most revolutionary and dangerous point
the nation will have faced since 1861 and the early 1930s.
