Double bottom, recession, inflation, gold

AND THE ANSWER IS: "Alex, I'll take 'The Bloody Obvious' for $ 200." The question is "Are we are in a bear market." The daily double question is wether we have a bear rally this week off of the double bottom the S& P made Friday surpassing Jan. lows, or if we continue south.

The S&P is down 9% for the year, and down 17% since it's Oct. high. Nobody wants to hold stocks over the weekend. The S&P has fallen .8% avg every Friday of the new year. According to Barron's, since the first of the year, if you would have shorted Thurs, went long Fri afternoon, and sold the monday bounce, you would actually be up 9% for the year. This is unlike last year when shorts were afraid to hold over the weekend in fear of a buy out.

I believe recession is a sure thing, though not entirely baked into the markets. Another reason for continued lows.

Inflation would be at near 11% if the same parameters used for the CPI in the 60's were used today. 4.2% my ass. And it should only get worse. Another 1/2 point fed cut expected this month. Lets just keep printing more money to bail out the banks. Government secured entities such as Fannie Mae, Freddie Mac etc have trillions of exposure. Lets not forget govt. insured pension plans when some bigs go belly up. And the printing presses will be smoking when the govt. has to start paying mega billions to social security recipiants and other entitlements that have automatic COLA increases.

Add to that, Treasuries are returning a negative yield, in other words if you buy a 1 year treasury note at 2.5% and inflation is 4.2%, (lol), your buying them to lose money. Now what dumb countries are going to continue to invest in our treasuries and finance our gargantuan debt at a loss?

So as you might guess, I think GLD is a buy on any pull backs and goes to 1300. Time to sell is when you see it on 60 minutes on how much it has gone up. Other commodities are a bit more dubious. Some of the ag companies like MON and POT are sporting some pretty high P/E's and could be due for a pull back. MON is right at the bottom of its trendline.

A lot of folks are saying the financials are now a buy. Don't buy it. Remember a year ago when they were all saying housing had bottomed. They may get a short term bounce but this financial situation is going to take a long time to play out. KFN longs got a repreave Thurs. this week when it held a CC that pulled it from the abyss as the street thought it was another TMA ready to happen. It still could be as its main business is buying residential and commercial mortgages. Looking for short entry into that one some time this week.as It is sitting at its 5 month resistance right now at 13.00. Someone on Active Trader called nice short after the CC Thurs. and it tanked a buck in a half an hour. But I forget who it was so can't give credit.

Well some thoughts on a sunday morning, clearing the cob webs out. Everybody enjoy the extra hour of DST. Time to come out of winter doldrums.

Shut up and trade!
fool1