I could also tell you that there is a "crash" coming with out having "insider" knowledge.
Today the market is up, which is a good thing if you own stocks, like I do; however, the bad thing is that bonds went up as well. If you look at
yahoo:
finance.yahoo.com... you can see this. Stocks and Bonds have an inverse relationship and the more they continue to move in the same
direction, the more it concerns me.
It appears that we are heading for the "W" scenario instead of a "U" shaped scenario.
The "U" shape would suggest that we've bottomed out and are going to slowly rise again. But it doesn't make sense. Lets consider this: are the
banks fixed? No, balance sheets are manipulated just like earnings. People are quick to forget about Mark-to-Market; which helped virtually every
bank look good in the 1st quarter.
Secondly, earnings. Is anyone impressed? Not really. You can't continue to improve the market by saying, "oh, earnings weren't as bad". It's
not going to work. General Mills earnings was nice, but in the coming weeks, I see:
Week of 7/6-710
AA, CVX,
Week of 7/13-7/17
INTC, JNJ, YUM, HOG, IBM, JPM, NOK, BAC, C, GE
Week of 7/20-7/24
HAL, HAS, JCI, LMT, MRK, SYK, KO, UNH, YHOO, EBAY, LLY, GSK, PEP, PFE, BA, USB, WFC, AXP, T, BMY, BNI, MCD, MSFT, RTN
Week of 7/27-7/31
BWLD, VZ, BP, X, VLO, V, MA, MOT
As you can see, virtually every major company, or at least quite a few that can effect the market, are posting earnings in July.
Now, if I believe what will happen, the "W" scenario, this would probably be the start of it. Unemployement is still very high, consumers are
saving at an unprecedented rate, so logically, I can conclude that quite a few of these companies are going to post sub-par earnings. It would only
take one big company to do this. I'm going to use Chevron(CVX) and JP Morgan(JMP) for my example. Lets say Chevron posts good numbers that beat the
street, not much, but enough too get everyone excited. Them JP Morgan comes out and announces it's posted a loss. Let's it's not terrible, but it
isn't good. According to yahoo:
biz.yahoo.com... they're expected to post an EPS of .08 per share. That isn't
good but I think if they hit that or surpassed it, the market would go up because it would show the big banks might "have it under control". But I
don't think they'll hit that number. Let's say they hit an EPS of -.55 per share. Right here, the market's rally dies.
I'd like to think I'm opptomistic, but, when it comes to the market, I see no reason to believe that I should be. Right now I'm happy to be making
some money back, but I'm very Bearish. We're at what appears to be the top of the "V" in the "W" and its about to turn ugly again. I'm not
sure if we will retest the lows that were set in March, but I think we could go that low again, or lower.
With that said, maybe it's good for another drop. Maybe people will realize that the politicians are not fixing the problem.....things are going to
have to get a lot worse before it gets a lot better.....but, I'd like to think we'll be able to come out alright. Companies that suck, like AIG,
are supposed to fail in a recession; it's to clear out all of the bad, and bring back the ones who know what they're doing, that know how to
survive...it's supposed to be a breath of fresh air. Instead, we're just breathing in the same smog that's been poluting us. While I keep hope,
sadly it appears to just be wishful thinking.
