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The Intelligent Trader's - Long and Short of It
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From: Robert A. Christy Editor/Publisher, ‘The Intelligent Trader’ http://www.intelligent-trader.com http://www.christyinvestments.com
Date: March 1, 2009
I have been trading the euro pretty aggressively over the past 2 months and the biggest drawback is that I have little energy to write my weekly missives. After watching ’60 minutes’ last night, I decided that it is high time I took pen in hand and got back to it.
I am still seething about that I heard. Morley Safer called Bobby Jindal, Governor of Louisiana, the Great Beige Hope of the GOP. Outrage! When I went to the 60 Minutes site this morning to retrieve the transcript, not only had the transcript been edited, but the video had been as well.
CBS owes Gov. Jindal an apology – A PUBLIC ONE.
The Numbers
The market begins on an ugly note. Last week, the DJIA fell 4.11%, the NAZ 4.40% and the S&P 500 dropped 4.54%. February 2009 is now the worst February on record. The only bright spots last week were gas and regional banks. Most of the big gains were scored in the Ultra Short funds.
The wrong people are now shorting the market and trying to pick up nickels in front of an oncoming bulldozer. This is a good sign because the professionals are now the ones quietly doing the buying and covering their shorts. Just remember that forming a bottom is a process not an event.
Bullish Percent
Sector Bullish Percent
The Market
Why is the market still going down?
1. We have elected the most anti-capitalist president in the history of the Republic? 2. The Democrats have a near filibuster proof majority in the US Senate. 3. The media has abdicated their 4th Establishment responsibilities and joined fray pushing forward the most liberal agenda in history. 4. Newsweek Magazine’s cover suggests that we are now all socialists. 5. The average American has no clue what a socialist is nor do they understand that EVERY attempt at socialism has failed badly. 6. The stimulus package that was just signed into law was anything but a stimulus plan. 7. The length of it suggests that no one has even read it. 8. The engines of economic growth, ie the real drivers of the economy, are being punished and demonized. 9. Obama is showing that he is NO RONALD REAGAN. He is fanning the flames with the negative oratory. His goal is to clearly draw people to government dependence and not push them to economic freedom. 10. Obama’s stance on defense shows a weakness in character and one the militaristic countries will exploit at any chance. 11. The people who are most responsible for this debacle (Chris Dodd, Barney Frank et al) are the ones that ordinary citizens are looking to for the fix up. 12. Energy, Protectionism, Illegal Immigration … the list goes on.
The Economy
The consensus is that we are in a recession and have been since the end of last year. If we use that scenario, then this slowdown will be longer and deeper than the past couple of economic slowdowns.
The Dollar
The dollar is locked into a trading range and we will try to milk it for all it is worth. Our forex accounts came in flat for February, but losing a little is far more favorable than taking a straight up shellacking. The yen is no longer acting as a safe haven and China surrogate.
For the next few weeks, we’ll trade both sides using Bollinger Bands as a way to fade the extremes as they revert to the mean average.
For those thinking about GOLD, gold is being accumulated not as a hedge against inflation, but as a hedge against DEFLATION.
Oil
Oil continues to mystify. The price is range bound between $32 and $50 a barrel. Energy is as quiet as I have ever seen it. Does this mean the energy crunch is over? Not by a long shot. When the price was rising last year, consumers cut back their consumption leaving refiners with an over supply. Once these stockpiles are drawn down, normal production should resume.
Note – Over the past few weeks, China has entered into a long term agreements with Brazil (Petrobras) and Russia (in the form of a loan) to help meet their future oil demands. Look for this to continue while the markets remain in flux. (I own Petrobras and will continue to buy it as the price recovers)
Operational Note
Due to some recent law changes in the way email is processed and delivered, I am moving my email capabilities to a new set of servers. The process has been slow going, but the end is in sight.
That’s about it for now. Let me here from you if you have any questions.
Robert Christy
P.S. The currency market (forex) is the place to make money this year. If you’d like to know more about how you can participate in this – just send me an email and I’ll send the information to you.
P.S.S. Please fee free to forward this to your peers, friends and anyone you think would benefit from its contents. They will thank you for it - and so will I!
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Robert Christy is a professional currency trader, stock trader, money manager, author and speaker. Mr. Christy is the President CEO of Christy Investment Group, Ltd., a fee-only registered investment advisory firm. He is also the Managing Partner and Portfolio Manager of Crabapple Capital Group, LLC and the editor/publisher of The Intelligent Trader, a subscription based long/short trading service. At the time of publication, Mr. Christy may from time to time write about stocks in which he, Christy Investment Group Ltd, Crabapple Capital Group, LLC or The Intelligent Trader has a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a specific recommendation to buy or sell stocks. Mr. Christy appreciates your feedback and invites you to send it to rac@intelligent-trader.com .
Robert Christy The Intelligent Trader
The Christy Investment Group P.O. Box 625 Alpharetta, GA 30009-0625
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© Copyright 2009 Robert A. Christy, The Intelligent Trader
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