Thursday, June 25, 2009

Market outlook for June 25, 2009

Well, the markets are headed lower again today. Several news items contributing to this. First Weekly Jobless Claims were up 15,000 to 627,000. The significance of this was that most expected a decrease in the number of claims and for the overall number to dip below 600,000. Secondly, Continuing Claims also rose an unexpected 29,000 to a total of 6.74 Million jobs.

El Erian, Co CEO of Pimco said this morning that he agreed with Warren Buffet, he was not seeing Green Shoots. He also said "it is too early to relax and it is pretty tricky out there right now."

Art Cashin on CNBC said this morning it looked like we are almost confirming a Dow Theory Sell signal and he expected several corrections each going lower over the next few months.

It looks like finally many are coming around to what I have been saying for over 2 months now. After the close yesterday on CNBC, a man from Lowry Research said we have had two Mondays where 90% of the trade for the day were all on the sell side. He said he expected us to return to the lows of 6,440 and may go below it. He based his reasoning on the fact that Volume has ben light on the rally up compared to the volume coming down to the lows in March and that not many bought into the rally as there is much cash on the sidelines. Most of these viewpoints I have posted here and is why I told many to stay with their ETF Ultra shorts, TZA and SDS and others they had and to buy more and average down the purchase price. It is why I said to sell Apple a week ago when it was near $140 and take the profits. We are headed lower and lower for a while now. Don't get sucked back in on a correction because while the market will go up some days, we are headed for a staircase pattern down for while to come.

Time to sit back and wait now to see when we go significantly lower and how much. But the signs are clearly negative now for the markets. It is not too late to buy some of these ETF Ultra shorts like DXD, SDS, TZA and others as the prices have been low for a while. TZA, for example is now about $25-$26/share but was $20/share recently.

Don't forget if you have not voted this month on my Mini poll to do so. It is on the right margin. Thanks!


Well the market has thrown the analysts a curve ball, as the market now is up with the Dow up 150 points. Will it hold today? I have no clue!

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