It’s not safe to short….at least for now.

It looks like the federal government and the central banks around the world are weary of the decreasing amount of wealth in consumers in the United States.  The decrease in real estate equity is one factor.  The decrease in stock value is another factor.  The decrease in income as opposed to inflation is another.  Of course the slowing job market is a major one.  With the decrease in property tax revenues a lot of states who are already in financial problems are cutting jobs especially in government services such as educations and social services.  So now it’s eventually going to lead to a business slow down as we have to lower work force and spending which creates the downward spiral we call a recession .  So now we’re all pretty much hoping on the recession bandwagon, the central banks have to attempt to slow the crisis.  With their move to exchange liquidity in the market by exchanging treasurers for mortgage back securities, it tremendously allows banks and business to use their deadweight securities as collateral to borrow against.  This is pretty much more significant than any rate cut at this time as it’s a credit and liquidity issue.

I think the bears do have something to think about with today as a starting point as the solutions start to appear in the market.  Although the long term problems are not gone by any means, in the short term, there seems to be a few catalyst to push the market up to 12500 or so before another downturn.  The catalyst include investment bank earnings and the fed meeting next week.  There will probably be momentum going into these catalyst so it’s good to be quick on the long side or not in the market at all.  I took off all my shorts last Friday and I’m long NMX and FCX but unfortunately, I did ride the punishment yesterday on the FCX as all the material stocks got punished but it looks like today will probably go back to positive and I’ll probably start taking off the position as the market rises slowing into the end of the week.  But once again, good luck people and trade well.