Monday, June 7, 2010

This Cat Can't Bounce

Editor's Note: It's just a few minutes before 2:00 pm on the East Coast, and with markets little changed from their opening levels, I'm confident in my title for this post. After Friday's jobs report post-mortem, this market is due to fall at least another 10% from here, though it's unlikely to do so today. Owing to commitments (Monday golf league), Monday's edition of Money Daily will be delayed until about 9:00 pm EDT from today until mid-October.

Dow 9,816.49 115.48 (1.16%)
NASDAQ 2,173.90 45.27 (2.04%)
S&P 500 1,050.47 14.41 (1.35%)
NYSE Compos 6,512.42 87.85 (1.33%)

Declining issues overwhelmed advancers, 5032-1552. New lows trounced new highs, 268-76. Volume was higher than most of the last two weeks, though hardly overdone. The clear signal is that selling continues, or, the next wave of selling has begun.

NYSE Volume 6,385,006,500
NASDAQ Volume 2,222,428,000

Oil dipped an ever-so-slight four cents, to $71.44. Gold rocketed higher by $23.10, to $1,239.30, approaching all-time highs. Silver exploded higher by 5%, to $18.15, a gain of 86 cents.

Without a doubt, investors are nervous and unwilling to hold anything but gilded assets, though few are available. The major averages are at their lows of the year, having pierced support levels long ago and again today in grand fashion. A full resumption of the bear market is upon us. Equities should be disposed of as quickly as possible, if you're actually stuid enough to be holding any. Valuations are out the window as risk has resurfaced in every conceivable manner.

Cash, land, and tools of trades are all that should comprise a proper portfolio.

My golf game is poor (55 for 9 holes, bordering on embarrassing), but it shines in comparison to every technical and fundamental measure of global equity markets. Stocks today are generally overvalued or mispriced.

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