everyone i am warning you all take action now since the BP's are all falling fast now it';s going to hurt you if you do not step up to the plate.
Good Morning all
The internals on P&F have given a serious all out sell signal with the events of yesterday. That was no rally folks, it was a lopsided swamp job for the sellers as the funds were unloading stocks hand over fist. There are major risks right now in this market that could move your stocks, your holdings down the toilet with much pain and carnage. Every "major" Bullish Percent & all minor BP's are in O's and falling rapidly. When this set up aligns itself like this the meat of this move is far from over. Stocks are going to correct now in a big way even the best of breeds. So do what you need to protect your holdings. Crude has exploded over the last few weeks giving a negative effect as well. The bright spot now is the bond market as yields are coming down fast and Fed Funds are going up fast signaling the FED's change of heart between inflation and growth. We'll get a glimpse of that what with the GDP this week. Housing is still falling both in price and in sales we have not seen the bottom yet, i think that will come late winter next year in 2008. As this drag on the economy continues more and more of the Fed members will move off inflation and lean heavily toward helping the deteriorating technical picture of our weakening situation. If you think about this, there's what i call a "trickle down effect", from this fall out in housing. There's a ton of sympathy plays that make all their money because of housing & construction. Well those companies that hang their hats on this sector are going to implode quickly and lose a lot of sales and money over the next year or so. The markets while being extreme on most occasions always corrects at some point in time and housing is no different then the markets. The sub prime debacle is still out there everyday on every possible media form telling us the next big bomb is just a blip away. I truly think while it may expand it's a very small area of the overall banking & mortgage industry. The TNX which is the 10 year yields is falling sharply as predicted weeks ago as the bond rally nicely. All of this is good for interest rates hence at some point we could see 5% mortgages and that alone could spark renewed interest in the housing market. Stay tuned folks this correction is far from over and could get even more ugly all the way thru Oct-Nov Cycle lows. Stay alert and be careful out there.
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