MJTT

I was given the advice by a couple of all-star traders (and I mean that in serious context) on the iBC site to watch January very closely due to the inception of our history-making president.  In my opinion, January should be ugly as Betty due to terrible Q4's and some ugly Econ. numbers coming out this week.  Will that happen?  Nope.  The market doesn't seem to care about the decline in the Econ. numbers due to the fact that they think we've "hit our bottom."  Just wait and see.  If November was the bottom of our current recession, this would be the first time in U.S. history a recession ended on a V-Bottom.  Good luck with that bottom call.

My advice?  WATCH CRUDE OIL.  If we are ABOVE barrel production from our last inventories, I would take your profits and book it out of oil.  If we are BELOW barrel production from our last inventories (and that's what I think we'll be at), then I would wait until oil stops its sell-off (starting tomorrow, for they have now gotten way to much CNBC and Bloomberg hype) Wednesday and start shorting again.  Like I said a couple of posts ago, when oil companies get on a fast track to positive territory, they don't get off until the train is stopped and they've made sure they're the last ones off.

Another thing of note.  Please please please be careful of the Overbought sectors of the market.  With volatility having a very high possibility of picking up again, I have a very deep concern for how brutalized those OB sectors will be.  

An article was brought to my attention by a good friend of mine about the Treasury bubble and how close it is to popping.  In the case of this occurring, volatility may take a backseat and you may see a rather large equity rally and a rather large treasury/muni. bond trash heap.  You'll make more money if you trade correctly, so why waste your time with betting for the Treasury to be up a large percentage over a 5, 10, or 20 year span anyway?  Stick to your right now money makers, now your maybe later ones.

The market will do what it wants with the Econ. news of this week.  I am probably going to lose money at the beginning of the week on my FAZ position, but I can guarantee you that the SRS is moving upward for a reason.  You thought the "Housing Crisis" was bad two months ago?  You thought that someone put the bag of flaming dog feces on your doorstep and your doorstep only with defaulted mortgage payments?  As a math teacher of mine enjoys saying, "No no my friends, no no."  Housing Crisis Numero Dos is just around the corner, and mark my words; the SRS is about to jump to $80.

Am I right about this?  Who knows.

But come on now; when the mortgage rates were re-adjusted in the last month of 2008, everyone jumped on the opportunity to refinance and possibly get a better deal out of the ridonkulously rates.  I will bet you that 50% of the people that refinance(d) will actually prosper from that.  The other 50% will join the idiots and moronic folk who thought it would be, "a good idea to jump on a new opportunity."  How well did that plan work for you, Joe Schmoe, when you went to buy a house in May of 2008 and in September of the same year, you realized you had defaulted mortgage statements piled up in your mailbox?

Rule of Thumb:  RE-DEFAULTS ARE WORSE THAN REGULAR DEFAULTS.  Re-Defaults mean that you tried to be a moron again and it didn't work like the first time.  When those Re-Defaults start piling up under the mortgage giants FNM and FRE, now government owned, what will the government do to pay for them when the time comes in March/April?

Good Luck Mr. Illinois, that's all you.

FAZ and SRS.  I bet against the market until Wednesday.  If it seems as though I'm 100% wrong this week, I will hedge my bets, short the oil sector, and take profits from everything.  DUG is not ready yet, and if TNA, SSO, and DXO start to keep moving higher like they did on Friday, prepare yourself for a V-Top Rally and a whipsawing decline of the U.S. indices.  And please...  Watch the news.  The Gaza Strip isn't the problem, but what will happen to Israel from the support of other countries backing Palestine if they keep up with their shenanigans over yonder is.  

Thanks be to Jimmy Caaaaarta.

In accordance with the prior paragraph, here's something to digest:

For now, it's time to sleep.  If I get time, I will update intra-day tomorrow.  Otherwise...