So Far, Just a Bunch of Rotation

The market has backed off some from the recent highs but the biggest change has been the rotation out of quality stocks that the recovery will be based on (techs,greens, etc) and into crap like gold and commodities. 

This leaves the big question, will this recovery really happen?  So far too much time is being wasted on the financial institutions and too little on getting some things built. 

The other thing that bothers us GM.  The GM solution that is evolving is an example of restructuring gone wild. Getting rid of half the dealers is leading us down the road that dealers will probably become the next sector that will become too big to fail.  Plus service will suffer, and their are no car guys saying anything.  GM at the moment has pushed their product design and quality up to a point where anyone buying an ugly Toyota needs their head examined. Everyone seems to have their head in the sand in the auto industry.

Getting back to the market, watch this rotation, the S&P 870 area will probably hold the market for now.  Watch gold, when holders start selling, watch to see if the S&P rallies. If it does,  the market is probably ok for now.  If gold and S&P go down together significantly, take that as a sign that deflation is starting to rear its head.  Watch oil also, as we have said before,  this is a 30 to 60 dollar market this year and we have just seen $ 60.

The EMA ETF Fund NAV was 1158 at the close.  No position changes.

8:07 AM CDT