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Sell Equities - Sit On the Sidelines in Cash

|Includes: SPDR Gold Trust ETF (GLD), SDS, SKF

The Ole’ Sucker Punch
I’m speaking for myself, of course, but that was what yesterday felt like on some level.  The market trades in a restored manner for most of the day with a decent uptrend despite some unevenness, and yet the whole day, I’m waiting for it to reverse as so many other recent trading days have done both up and down.  And then, when it does actually reverse, I, yes, me, I’m actually in a slight, probably feigned, state of surprise.  Where did that come from? 

“Stocks and Commodities Up On Renewed Economic Hopes, Euro Down”

That’s where it came from.  When I actually read a headline along those lines yesterday morning, my head dropped to the side.  Did the author intend the paradox or was it simply a casual recap of the way things were at that moment?

We’ll never know but so long as investors and traders are grappling with whether the Euro is a viable currency, a currency that not so long ago was a serious contender to become the next reserve currency to the global financial system, and the EU a viable political and economic union, stocks are not going to go up and stay up.   

Ugly, Uglier, and Uglier Yet

The fact that you can’t buy a 1-month, 3-month, or 3-year snapshot of the S&P 500 at this time is worth noting.

(Please visit for all charts.)

Even the Bear Flag Is Afraid of this Market
Look at it droop. Perhaps it’s starting to feel the weight of its technical target of about 965.

(Please visit for all charts.)

This Is Not a Buying Opportunity
Do not go long equities here.  Sell stocks here.  Should all of the world’s uncertainty disappear and the market move with upward momentum through its 200-day moving, buy back then.  Until then, and I tend to believe there could be a good bit of time between now and “then”, sit on the sidelines in cash.  

Well, this doesn’t change very much.  I remain mainly in cash with a small position in GLD and a few small short positions.  I’ve started adding to one of the latter or SDS and will add more once it’s between $38 and $40.  This thing chunks up and down though so it’s more likely to be above $40.  I may add to SKF at about $26, but there’s little, very little to like about that chart even though I think it will gap up in sympathy if the European banking system begins to crack more severely.  I will add to GLD at $121 through $124.  Simple, I know, but safe. 

As always, thank you for taking the time to catch up on my thinking.


Disclosure: Long GLD, SDS, SKF