Market comments for March 31st, 2011

I was listening to Art Cashin, of UBS Financial Services, on CNBC this morning, and he said that if we just had a few of the recent upheavals of Governments in the Middle East or concerns over a default of governments like Greece or Portugal, or an Earthquake of magnitude 9.0 in Japan followed by a tsunami and then a Nuclear Power Plant meltdown, any one of these normally would have caused the stock market to have tanked with at least a 10% correction. That is an interesting thought to ponder as it has been Fed Chairman Ben Bernanke who has single handedly kept the stock market artificially up at these lofty levels. Listen to Art Cashin below.

It is extremely difficult to time the market normally but with Bernanke using the printing presses of the Federal government, it is nearly impossible to predict the stock market moves. This is not good for the long run because when there is a disconnect from reality, there will be an unforeseen negative impact to our country, which will be much larger than any stock market drop would cause, That is where we're headed and there appears no way to prevent it. As a close friend of mine has stated to me many times, "We are all finished!" I would add that we are not now built on the Free Enterprise System, but rather a manipulated, controlled government which protects the wealthiest of us and doesn't care at all about the Middle Class or worse, the Poor and no better than that.

It's the end of the 1st quarter at the close of the market today. But tomorrow we will hear the Unemployment Rate numbers which doesn't count all of our unemployed. Most expect the number will "look" better. It's April Fool's Day too and if you believe the numbers the government discloses, then you too are a fool! We seem to be a gullible populace, aren't we. Just look at all the Birther's in the Republican Party. :))

Dow and markets in for more trouble (Update)

As you can clearly see from the chart, the Dow is staying below its 3 year downtrend line, shown in red. This week's failed auction in Portugal to raise money was the catalyst for world markets selling off. It is a very fragile situation and this coming weeks auction on Wednesday should reveal more weakness in markets, unless someone steps into the breach and buys.

There has been concern shown in news articles that the Euro itself may fail. There are at least 4 Countries with the problem of high debt and a high % of their GDP allocated to paying it off. The US is not as bad as some of these countries but we aren't the best either.

In the meantime, be ready for another leg down in markets as more nervousness takes hold. This will cause the Vix to rise up again while Gold and Silver will take another drop.

I still have my ETF Shorts, TZA, FAZ and my Silver ETF Ultra Short, ZSL.

UPDATE 9:00AM

One thing I forgot but thought was important to add and that was that the Total Put to Call ratio on Friday closed at 1.21 which is the highest it has been since October. The rebound during the day from the 165 drop in the Dow most likely came because of this technical Buy signal. It may be good only or a day or two of trading but I think we are headed lower. Listen to the video of Noriel Roubini on Bloomberg.com to hear his most recent comments on the world financial crisis facing the EU.