Fixing Bubbles, a Perspective

Too many big cars, too many big houses, too many big bankers, too much BS, couple that with a willingness for a majority of the world to willingly borrow or lend on inflated bubble values and you have a prescription for what we are working out of at the moment. 

As this has unfolded we had the various time-frames of market reaction, disbelief from July 2007 to September 2008, recognition and short-selling response from October 2008 to March 9th 2009, and the current, badmouthing the cleanup from March 9th 2009 to date.  Market players are having a hard time accepting that there was no one other than  government who could fix this probem.  Everyone else was part of the problem.

There are a number of ways to analyze a market, some try fundamentals, some try technicals, some try psychology, and some try all three.  For us in this market, psychology gets the biggest weighting. 

On Friday the market broke out of consolidation and closed higher and now today has backed off into that consolidation area again.  We are still waiting for signs of exuberance before we move to our next strategy, long/short positions which will net out to a small net long position in areas where cash flow will start. 

The EMA ETF Fund NAV was 1114 at Fridays close.

8:23 AM CDT