Index Percentage % Volume
Dow -1.19% up
NASDQ -1.71% down
S&P500 -1.20% up
Russell2000 -1.53% -



It’s time to again bring out the old Lost in Space robot with all its bells and whistles shouting Danger Will Robinson Danger Danger. This is the second time this week.

Until some resolution is reached in the banking sector – probably nationalization – Financials are going to drag markets down.




Short Term Outlook

Both Citi Group and Bank of America were down 14% yesterday on fears of nationalization.  This lead the all the major indexes lower. The Dow closed at its lowest level since 2002. If ever there was a sector that looked like its fallen off a cliff its Financials.  The ETF that mirrors financials is XLF

Until, nationalization actually happens (hopefully this will only be a temporary phenomena) the uncertainty should drive US financials and all markets lower.

The next significant support level is the November low of the benchmark S&P 500.  This technical support may be able to halt the meltdown.

Best case senerio – and this is ugly – is a big volume big fall that signals a climax selloff. This would establish a bottom.  Right now it sure looks like any rally will get a lot of investors/traders selling into it. 

What positions do I Have?

This is the most common question for those of you who have my email address?

I practice what I preach for my accounts and a handful of others that I manage.  The non profit that I am treasurer of does is guided by a board and does not have these positions. Almost all are ETF’s – Exchange Traded Funds  

Long positionsGEX, FXI, EWZ & GLD.

Short positions - “ultra” shorts SDS & DXD (see Strategy section of blog)

Also have a small position in BRSIX (a mutual fund I’ve owned for almost a decade) and a few bonds. Also a small “ultra” short position in QID (short NASDQ)

I regret not having SKF which is “ultra” short financials. Predicting a meltdown in financials for over a month and concentrating on it this week in editorials you’d think I would have been smart enough to buy this position.  I did mention it in a few Investors411.

NBGLD is at new highs.

NBB –  Hedging  - As GEX, FXI & EWZ fall their size decreases. As “ultra short” positions SDS & DXD grows in value it increases in size. Therefore, right now  my overall net position is short the markets.

NBBB – Unfortunatly, I exited some short positions when the Dow fell below 8,000. I will exit some more short positions when financials stop falling. (this of course is a judgement call)


Each of you has different circumstances and asset allocations. So if you have my personal email address and can give me your overall % of long & short positions I will be happy to suggest what to do.  

Everyone else is selling so I’m thinking more now about dropping shorts. Investors 411 (see positions & strategy sections) did recommend protecting your gains when Dow got close to 9,000

Bottom Line – Cash is king right now and a 15 to 30% long position (depending on your level of risk) in stocks is recommended. Long positions should have been protected when the markets rallied. (see strategy section of blog.)

Long Term Outlook BEARS RULE


See STRATEGY POSITIONS & ARCHIVES sections of blog for more


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