Trickle Downs’ Last Hurrah …………..with update at 9:05
Bernanke and Obama have put together an approach to address the raping of America by the privileged class that has gone on for 28 years. This is a big deal and it is not ending quietly, but it is ending nevertheless. The right people are bearish and selling here, the Commonwealth Principle is alive and well, thank you. I have to admit that Ben Bernanke is starting to get my admiration, I don’t know if he is just getting seasoned or whether the Obama White House leadership is allowing him to flourish, but in any case he seems to be getting it. So we have two guys who are up to the task. And Geinther may grow up and join the leadership at some point.
The dollar strength we talked about yesterday is partially a function of the fact that the US has gone back into leadership mode with its six prong attack on the economic decline: 1) the Tarp emergency bank package; 2) Tarp 2 loose ends Banking package; 3) The Stimulus Package; 4) the Mortgage package; 5) the Auto Package; and 6) the Bank/Lending Package. Other than China, which doesn’t have to fight with the stalling tactics of Republicans, the US is in the forefront of the next economic wave.
Short-term, most investors are going to wait for the six prongs to be implemented, which will mean they will be buying the stock market above 940 basis the S&P. In the meantime, we have our positions in place for the first phase of the rally and will be moving 10 percent of our market exposure to the long dollar / short gold trade as soon as our points are hit, we would like to see gold break above 1000 a little first, triple tops are not bullish..
It is good that the 773 S&P area was reached overnight. If we can get the cash S&P to hit here after the market open the indicators will all be in place. The EMA ETF NAV was 904 on the close yesterday.
7:19 AM CST
UPDATE: In the EMA ETF Fund we bought $ 24,000 double short gold ETF “DZZ” at $ 19.05 and bought $ 35,000 long dollar ETF “UUP” at $ 26.50. In some of our other accounts we shorted “GLD” at $ 98.04 on the opening. As to Rick Santelli’s rant on CNBC yesterday, I agree with him, and have said the same for some time. It seems important that the plan does not include principal reduction, let those who did stupid things have something to live with for a long time. We also still believe that the bad banks should be nationalized, and the financial stocks are relecting that reality.