Lesser Sentiment

nike earningsAfter what looked to be a strong rebound in the markets yesterday, red trading continued on for Tuesday, as consumer sentiment begins to weaken once more. Analysts were hoping for the consumer confidence numbers to continue to increase into September, however, they have begun to trace back as we saw from today's released study. It was the positive performance of this number which sparked so much buying in the first place, but as I have always warned, sustainability is the key.

With consumer confidence numbers weakening, investors are worried for the upcoming unemployment data that gets released later on this week. Sure, the rate of job losses has consistently been decreasing the past few months, but we are still experiencing very high amounts of monthly job losses that will eventually take its toll. Speaking of job losses, one important element to keep in mind is taxes. In recent months, we have seen record amounts of government spending. Coupled with that, we have also seen a record amount of job losses which in turn will directly effect tax dollars. The amount of tax revenue received for the government has to be at record low levels, which is not good when you consider just how much debt spending is being done. This will be a problem that will carry into our children's generation to deal with the national debt.

Nike reported better than expected earnings today after the close, so markets could easily find there way back into the green tomorrow. However, the big question everyone is waiting for is the job losses released this Friday. UUP has been looking like a great buy as the dollar is beginning to rebound. In my opinion, as deflationary pressures continue to mount, the dollar should perform quite well. DRV is the new Direxion 3x inverse Real estate ETF. It has definitely been on the radar for me, as I believe we are near this turn in the market. Real estate is on the top of the list for next sectors to suffer, as property owners have been bunkering up the past 9 months for the storm that lies ahead. Indeed the opportunity is coming soon. Happy Trading.


  1. Rex Says:

    SRS flunked. You think 3x won't kill your readers?

  2. jeff Says:

    all shorts flunk in a bear market rally?

    FF didnt say dont use a stop loss or trade foolishly :)

  3. Anonymous Says:

    I hope FF is right, however hedge funds and vanilla funds are still buying every dip as evidenced on today's massive reversal off the morning lows. You can't successfully short this market right now. We need 3 days of selling in a row on some better volume to even consider a short term change in sentiment. You guys really want to jump in front of this train. Just wait for the trend to change before shorting or pressing shorts, beleive me don't fight this tape. We need a new fear catalyst to spark a selloff and I don't have a clue what that would be.

  4. Finance Fanatic Says:

    I agree, sustained selling is the key.. Today's red closing helps change sentiment, but it needs to continue along with increasing volume...And yes, Im always using stop losses, as to not loose my shirt, SRS has been a dog the past 6 months, but it shined before then. The market needs to turn and then I believe the old dogs will come back to good performance.

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