Eye Of The Tornado – my late commentary

As the American public sits back – some reacting, some not – and wonders what their administration plans to do with their money, I set my sights on pounding out a new post on one of my all time favorite areas; investing and finance. I don’t write about it often, but it is a practical hobby of mine to swing-trade and invest, even in these sketchiest of times.

How does it feel, my friends, to have no power while your country may go another $700+ billion into debt? That China and the Middle East own massive amounts of your money? I’m actually asking, not just being rhetorical. Canada may see similar problems soon seeing as we mirror our neighbours down south eventually. That’s okay with me, as four years from now may be the perfect time to buy a house. I hope to buy one from a really depressed young couple with 1.5 children who jumped in too early for the sake of image and lifestyle. It would make me “the” happiest to buy a home in an aura of dark humour.

Here’s where I stand on the stock market: it will continue to shit and/or puke blood. Not all in a row – but until this sorts itself out.

Citibank Chart - which way is down again?

(chart from somewhere within Timing Logic)

My general thinking is that we have another 50% (value) more to fall before we reach 2002-2003 levels – which is when money, oh, sorry, CREDIT, really started to be snatched up out of thin air. The key is that this is not money money. This is money without the inflation (cheap credit) – and the inflation is yet to come. That comes when the bailout forces the hand of god to create more money out of again, nowhere. Something from nothing is still nothing.

Those who thought that being able to afford a house and or lifestyle that was clearly reserved for the actua-rich had this coming – now the other millions have to pay for it. Perhaps we could blame it all on Gen-Xers.

On Oil and Gas I feel the same. Their charts are looking mighty “sick” as some would say. The thin air between today’s (and especially 2007’s) levels is low pressure air looking to collapse. This chart covers the support/resistance points. He sees a short term bounce before we break that level at 140 which was set in 2007. It was all fake and trade – and we’re probably going to see it fail.

Basic trend - Oil and Gas

(chart stolen from Slope of Hope – Tim Knight)

I find it unfortunate that Natural Gas will follow suit in an Oil stock failure, but that’s how it’ll go as they’re linked in trade. Natural Gas may eventually trade as an alternative energy, as it’s better for the environment – but for now one cannot invest in Natural Gas under the impression that it is a clean alternative.

So as the stock market, economy, and world markets tremble like a flame-throwing lion with a bad case of the shits, I wish you the best. Be smart, and don’t buy in the “dips”, at least not yet. I’m short both the S&P and Oil/Gas using ETFs SDS and DUG. Don’t take my “advice” though, read-up or stay out of the markets. Oh yea, and if you own mutual funds try to go more conservative with them too – as low as 30% equity.

More to come…