Steve is the Only "Jobs" Returning For a While

steve jobs backToday certainly answered anyone's question wondering, with uncertainty, where the future direction the market was headed. Markets came dropping out of the gates this morning as trading was down the entire day with no sign of day light, as the Dow ended down over 200 points today. Not only that, but the NASDAQ, which has been relatively strong recently, was down well over 3% today as economic data is beginning to weigh very heavily on stocks. This is something I knew was eventually going to happen, as for the past several weeks we have seen nothing much besides dismal economic data, but despite the fundamentals the market kept pushing up and up. Unfortunately for bull investors, the selling is getting much more heavy as is the volume, which could get even more scary shortly.

Even with reports of Steve Jobs being back in the full swing of things for Apple, it was not enough to boost up the tech sector. Commodities continues to get slaughtered as GDX (gold ETF) was down about 7%, and DIG (OIL long ETF) was down over 10%. Moves like this in the commodities sector is right on track with my worries of deflation. Seeing such strong moves makes me consider the time is very near. We will be able to see in the next few in some charts whether or not that time is here now.

Having this week being another very large auction week for Treasuries does not help things either. The government plans to auction off another $104 billion in government debt this week, which is bound to discourage investors, both domestic and international. The government and other companies gave us a hint weeks ago that the market was a bit inflated, when they decided to offer up billions in shares to the public. This is usually a big sign that we are trading in overbought markets.

After the Obama administration, earlier this year, predicted a peak in unemployment at 8%, they revised this number today, stating they expected to see us reach 10% in the next couple of months. The large degree of error on that projection shows that indeed our government could be severely wrong in several of their "projections." This makes me wonder what their end of year "out of recession" projection may get revised too. This also goes to show just how ridiculous the original bank stress tests were as we have already far surpassed every and all of our so called "stresses" in just a couple of months.

My account was rewarded heavily by the moves today. SRS and FAZ both performed extremely well, as are my puts with Prudential. My timing on my SDS shares are working out for me as well, as it seems that the technicals were calling it right. It will be interesting to see how strong this downward trace pushes. To see a rebound tomorrow will not be surprising, but of what degree is what interests me. Some more downward momentum and I have to consider to take some profits. If we do indeed rebound tomorrow, I will most likely use the day to take some stronger positions in SRS or FAZ. Indeed the pullback is here, Happy Trading.

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  1. Lin Lin Says:

    Hey FF, I been meaning to ask you.. You read about this threat going on with North Korea right? Scary, to think they may launch a missle to Hawaii. If there breaks some post war with NK, how do you think gold and oil will fair?

  2. Finance Fanatic Says:

    Lin Lin, I don't think North Korea is dumb enough to launch a missile to Hawaii, if it were so it would be sure to effect both oil and gold as commodities go up during wartime.

  3. Lin Lin Says:

    Gold is getting slaughtered right now... You expect a rebound anytime soon? I got in on gold last friday thinking it'd rebound a little I lost some money as it kept dropping.

    Company I brought was GSS... Lol you can imagine how much shares I brought...

  4. Anonymous Says:

    FF, I bought FAZ at $10 a while back. Do you think that this ETF has its new highs now in the $5 mark and it will never reach the original highs of $50 or so that we were seeing back in March and April

  5. Anonymous Says:

    FAZ will never see 50$ again, it could get up around 10$ though, 3x leveredged ETFs move quick and have nasty decay