Market outlook: The week of Dec.15th

I was watching 60 Minutes last night, and (if you haven's seen it please do) when I heard we are at the beginning of a second wave of Mortgage foreclosures, which will peak in 2010-2011. This is just awful going forward. It shows that even if the stock markets rise, it is only temporary. The news is going to depress people for the next few years and we are all going to be wishing the pain would stop for so many. Even President Barack Obama will have difficulty getting in front of this mess. I can't think of a single thing to turn this coming crisis around and that is unusual for me.

So my outlook for the market, not only for this week but for many weeks and years is not good. This temporary bubble of a recent rise in the markets is truly temporary. After the holidays we are going to face another round of reality and scary market drops. The best place to be will be on the Short side of the trades. ETF's such as SDS, DXD, TZA and others will be the place to be. Even if the market rises, it is not going to go up enough to get the shorts to dump them, because all they have to do is wait a bit for the bad news to put a damper on any rise. short term trades to get any profit will become a skill worth having.

This Friday's Options Expiration is quadruple witching, so watch for considerable volatility in the market. Playing the channel should work if you traded near either end of the range between 73,00 and 9,500 on the Dow and respective ranges on the Nasdaq and the S&P500. I still own my SDS and will be looking for a way to sell it if we get nearer to the extreme. If it doesn’t get there this week, I will just keep holding it and either hold or add to my position in it. Good luck my friends.