The market’s been rising for about six weeks now.  I never imagined that it would rise this much but hey like they say “the market can stay irrational longer than you can stay insolvent.”  The economy is far from getting back to normal but there are signs.  But in all seriousness, it’s still far from where it will recover because the unemployment levels while hitting records in certain states like California, Oregon and North Carolina and also 30% of the states have unemployment over 9%.  Although I try to talk myself out of being a pessimist on the economy, it is rather difficult because when faced with the largest drop in personal wealth in real estate and equities markets, the consumer has changed forever.  I think it’s a long term behaviorial change not just something cyclical change where future profits will not grow as fast as the last ten years which much of the growth is due to technological changes and web adoption but there is no huge game changer in the future other than green technology.  Perhaps one dramatic change will be inflation that will push profits higher but perhaps that all that we need.

I wanted to let my readers know that I’m working on a couple business projects which may seem like a horrible idea at this time but in reality the best time is during recessionary periods where you can maximize capital since you can lock down fixed cost at a low rate such as rents and equipment while starting during a expansion period will cause a higher fixed cost.  Variable cost will be the same for all businesses during any period without factoring economies of scale.  It is during the recessionary period where you can develop a grow a business to the point where by the time, the economy starts expanding, it will be easier to obtain capital to grow because of a track record that was developed.  So there may be less blogging but I’ll keep it up because I still will be monitoring swing trades but at this time, it’s difficult to be long and slightly difficult to be short.  I’m siding toward the short side now but I think after a majority of earnings is done then we’ll see some weakness.  My S&P resistance is 870s or so while support is now about 750s.  So we’ll watch out for those points.

Disclosure: Long UNG, Short ACC

Popularity: unranked [?]