Just a few comments today. Before I get started I wanted to share a great clip from CNBC today that featured Hugh Hendry from Electica Asset Management. Hugh's fund is currently up 40% this year. According to Hugh, stocks won't get back to the highs until 2025!
I thought this was great analysis from Hugh. There is currently a huge disconnect between the credit markets and the equity markets. The credit market is basically pricing in a deflationary depression folks. We are seeing 50 year lows on yields in treasuries. Short term treasuries are now paying .005% yields! Investors in the credit markets could care less about the returns on their money. They want safety! Meanwhile, the bubbleheads on the equity side are out there screaming that the bottom is in.
I have always said since day one on here that the traders in the credit markets run circles around the traders in the stock market. Always stick with the bond boys. Until these two are on the same page in terms of where the market is headed, I wouldn't go near stocks!
The market continues to bounce around like a pinball. The big three were in Washington again begging for money. I wouldn't give them a dime until they slash costs and prove they can make money. Detroit autoworkers get paid $72 per hour including benefits. The autoworkers in the southern US that make the japanese cars make $44 per hour including benefits.
Uhh hello! Houston we have a problem! The big three will never make money as long as there is this type of gap in costs between the two.
Its all about the jobs number tomorrow folks! I am going to make a small play on this news. This is a risky one and I will have a stop on it.
My guess here is the bulls already know this number will be awful. If the jobs number comes in at or a little below expectations I plan on buying a small position in SSO which is long the S&P 500 AFTER the gap down in reaction to a jobs report that is guaranteed to be ugly.
If the jobs number comes in way below expectations then this trade is off the table. I will have a tight stop on this if I place it because the market has been acting goofy. I also plan on selling on any bounce.
My guess here is the bulls will be prepared for the number tomorrow. Lets see what happens.