Dollar Bounce

The dollar is bouncing as market participants rush for the safety of treasuries. "The Skeptic" is not a buyer. Keep an eye on the Yen which has been even stronger. Yen strength = carry trade unwinding.
Today should be interesting. Never underestimate the bulls' ability to snatch victory from the jaws of defeat.

Late Day Thought

Larry Kudlow is an asshole.

No Fear

As I stated: No Fear. None. The predictable last hour rally came through for the bulls, though 15 minutes early, and we rallied from 13,338 to 13,500ish on the Dow. Everyone is a dip buyer in this market. It works until it doesn't.

Hubris

Dow Industrials down 280 pts. and CNBC is talking about what a big up day tomorrow is going to be. Absolutely unflappable. I smell very little fear.

Skeptical Prediction

Some of these previously announced buyouts won't get done as the credit market chokes on all this supply. There are billions of dollars of deals backed up and the terms at which these deals can be completed are changing everyday. When one or more of these deals falls apart it will be a sobering reality for the bulls.

Pain Ahead

It's been awfully hard to bet against the bulls lately. Bad news hasn't seemed to matter. However, there have been some menacing trends developing. The breadth of this market has faded and the advance has been led by fewer names. Sure AMZN and AAPL shot up after earnings but the entire banking sector is dropping like a rock. Pretty hard to sustain a bull market when the financials, which represent more than 20% of the S&P, are this ugly.

Housing is a debacle. The economy is slowing. The popular viewpoint these days holds that these two facts are unrelated. Not so. Housing has sustained the economy for several years and without it the American consumer is in trouble.

Don't forget oil at $76. Collapsing dollar. Inflation problem. I could go on and on. Never have I seen such a divergence between reality and the market averages. Increasingly a market dislocation, always a low probability event, is a possibility worth considering. Be careful out there.

Dollar Index to Crack 80?

Trading 80.01. Is today the day? Or do we bounce first?

Ongoing....

This Week's Stock Pick

No pick last week. You could call me a lazy son-of-a-bitch and not be entirely inaccurate. Every week, aside from two holiday shortened weeks, since this the groundbreaking of this "blog" I've granted you a pick. Last week I was asleep at the switch. So we'll get right to it this week and maybe I'll even get a bug up my ass and grant two picks this week...but first things first.

Without further adieu... I give you GSS- Golden Star Resources. Currently trading at $4.13. The dollar is collapsing and it's time to pound the table on gold. Now, it should go without saying that any single digit midget (stock under $10) is inherently speculative. Caution is advised. Nonetheless the set-up here is too nice to pass up. GSS build a huge base between 1999-2003, then ramped to a high around $8 before collapsing back to spend 2005-06 consolidating between $2 and $4. Now it has surmounted the four dollar mark and become an obvious buy.

Disclaimer: In no way should this post or any other be considered a recommendation to buy or sell any security. Should you buy this stock based on this post you may find yourself homeless by Christmas and have to scrounge trinkets out of a dumpster to give to your children as gifts.

Disclosure: Long GSS, Long gold

Dollar Continues to Slouch...

...dangerously close to key 80 level on dollar index.

Still developing...