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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 15, 2009
The Numbers
The market begins this week on a favorable tone. We’ve had several good days and I think it will spill over into this week for at least a day or so.
On March 1, I opined how “the wrong people are now shorting the market and trying to pick up nickels in front of an oncoming bulldozer”. I said that it was a good sign because the professionals are now the ones quietly doing the buying and covering their shorts.
I think this is a short term bounce and may likely take us back toward the 200 day moving average. The worst isn’t yet behind us it will likely be late summer before we can make any kind of guess as to what’s next.
I do know this, the indicators have the Offense back on the field and we’ll take our cue from that.
Bullish Percent
Sector Bullish Percent
The Market
The market is extremely oversold and is overdue for a bounce. Given the fact that the wrong people are short the market and the big money is in bonds, the market is due. In baseball, the most feared hitter in a clutch situation is one that’s “due”.
I am putting money to work in just a couple of sectors – healthcare and oil. I am a buyer right now of natural gas. I think the cram down is over done here and that the sector is positioned for a good move up. (Subscriber’s – an email went out on Friday detailing the new purchase recommendation)
The Economy
Late last week, we were treated to some more Obama rhetoric. After a couple of “up” market days, he commented that the economy may not be as bad as he had feared. The doublespeak here is bad news and reinforces the notion that he is clueless on the subject.
The numbers are still pretty bleak and earning season starts in just a couple of weeks. For now, it’s wait and see.
The housing market is front and center this week with Building Permits and Housing Starts due Tuesday. From my perch, there is no good news and I would not be surprised to see a worse than expected number.
Inflation numbers are also due this week. CPI and PPI are both consensus increases over last month. If the readings come in higher than expected, the talk of coming inflation will dominate the news.
On Wednesday, the FOMC rate decision is due. On everyone’s mind is will the Fed keep the base rates floating or actually fix at the rate at something near zero.
Thursday, the Philly Fed comes out with the manufacturing number. Let’s hope it shows some month over month improvement.
We’ll take all of our cues from the numbers and tread lightly as always.
The Dollar
The Chinese are worried about our ability to repay our debts. No kidding. I am too. This kind of rhetoric sends chills down my spine because at some point, we are going to need to prove to those holding our IOUs that we can I fact repay our debts.
I am still trading the Euro back and forth for all it’s worth. The ebb and flow are giving us some point profits and we’ll take all we can get.
I talked above about a lot of economic releases this week. If you’re thinking about “gaming” these numbers, may the luck of the Irish be with you. Going toe to toe with Central Banks is a fool’s game and one that you are likely to lose. I for one will be sitting out the 15 minutes before and after the releases just to play it safe. I may fade a super extreme, and if I do, it will be with a very small position and a really wide stop.
Oil
Not much on the oil front except to say the OPEC met this past weekend to talk about restricting supply in order to bump prices. More on this later…
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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