Market Outlook for May 1st and beyond

Friends and visitors, I wrote a note to a close friend tonight and thought I should post this here about my view of the market today and what I expect in the next week or so. Here's what I told him.

"I have been watching the Put to Call ratio and it has been relatively low which means higher probability of correction than a market advance. It closed today at 0.85 and opened at 0.65. I put a chart on the Blog on April 18th showing the recent year and a half range and when the number approaches the low of the range it is a sell signal and if it is at the top it is a buy signal.

So best to just sit and be as patient as one can right now, until we get a clear signal. The Volume today was a little ahead of yesterday and the market closed down, not up. When volume increases and the price drops, it is a >u>bearish sign. One other thing. I have been tracking Insider Trading and I can tell you as fact, Insiders are selling more than buying, and the amount of cash raised by selling is much more significant a Dollar amount. It has been that way since the market dropped last Fall and nothing has changed that. If Insiders saw a better picture of the economy going forward, they would be buying, not selling."

As I wrote in the previous post, the Stress Test results for the 19 largest banks are not going to be released until the end of May. Banks are most likely under capitalized as we have heard this past week by as much as $1 Trillion. These bank assets need to be dealt with by either creating good vs bad banks or something like Chapter 11 bankruptcy to wipe out shareholders, instead of using more government money. But then we are back to a lack of confidence in the banking system, a possible run on the banks or complete collapse of the banking system and President Obama isn't going to allow that to happen while he is in charge. Toxic assets are still on the books and no lipstick is going to make that Pig look any better and that is the problem!

Speaking of Swine Flu, it seems to me that current technological advances in communications using the internet, cell phones and television, has allowed healthcare officials to get a very quick handle on this outbreak, which has the effect of minimizing its affect on humanity. Contrast that to 1918, where it took weeks and months to realize what was going on and to mobilize precautionary measures for use by the public. It was too late then and I lost my Mom's parent during that period, but now, everyone in the world knows to wash their hands frequently, cover their mouths when coughing and avoid large gatherings or enclosed spaces. VP Joe Biden got himself into trouble today, for saying what everyone knows was the truth. There is something very refreshing about having a VP that is wired to just say the truth and can't help himself. You got to love him!