I believe the following:
+ 2009's equity rise was based on fraud and deception; the recent weakness, and the choppy market down we're going to see for years to come, will be based on ever-emerging reality;
+ The ability of the Obama administration to defraud and deceive still exists, but that power is waning, and it will eventually wither away into outright impotency (which, given who the President is, is bound to be discomfiting for one and all);
+ The OTIS ("Oh This Is Silly") disbelief the bears suffered during 2009 is now being experienced by the bulls. Even the bears (me included) are having trouble believing how powerless the bulls appear to get off the mat and execute some kind of meaningful rally.
+ The likelihood of the Dow 30 getting above 10,750 again anytime before the end of the next six years is precisely equal to the likelihood of having a mature, medically-helpful discussion on /b/ about anal warts.
In the little bit of trading the /ES got to enjoy late Sunday and early Monday, a brief push of 4.25 points higher was smacked down into – – yet again – – a loss.
The Euro isn't helping. The strongest rally I think the Euro has in store would take it to ~1.3, and no higher. It's almost a can't lose situation for the bears. If we continue weak, our shorts get more valuable. If some stupid-ass new program comes out from some government, it'll just be another opportunity to short at better prices.
This is not to suggest I see nothing but lower prices ahead. Indeed, on Friday, I was buying up what I considered to be battered stocks with appealing risk/reward ratios. One glancing at my holdings might wonder if I have a fixation on tickers beginning with A and B, but I simply ran out of time. Here they are:
I am nowhere near done looking at stocks today, but happily it is a market holiday and I've got extra time. My current portfolio is 148 shorts (somewhat trimmed on Friday), 18 longs, and 1 ultra-long (that would be TBT, since I want to prove that it is possible, sometime in human history, to make money on this beast).
I welcome any market direction at this point. I think retail and energy are the areas most prone to a bounce, and should they have one, I will have a very large number of new shorts I will be waiting to add.
As I mentioned earlier, there is basically no economic news of note this week, so it will be quiet on that front. But the following week is chock-full of economic reports and earnings season (including a little company called Google) blows into full swing.
And that's when the real fireworks should begin.