This Rally Is Over!!!

The greatest bull market EVER!!!! Its over?? hehehehe. I don’t think so. It isn’t over until I say its over (not my words…they would be gentle Ben’s)… I’m hearing some fairly loud proclamations this rally is over. However I don’t think it will end quite that way. Now a bigger question is whether or not we are nearing another correction and that is certainly a possiblity. But you have to look at this from the perspective of mass psychology and the purpose of this entire exercise. If we use the thesis (and btw I do) that this entire Stock Market run up is to instill Confidence back into a shattered economy and investor psyche. The theory is that as we see a continual recovery in market prices that we will be enticed to rekindle our animal spirits and invest in new business ventures which will have a noticeable effect on GDP and employment. Once again all will be good as velocity of money returns and the consumer spends. Here is the rub. If you are saying that the greatest power in the world is going to allow a 20% correction in the market right here…right now. Then I have to take exception. That level of correction would certainly not be expected by a lot of people so that is in its favor …BUT…and here is my problem. If they pull this down to flush out the weak handed newbies then you can kiss any semblance of the above theory every taking hold within the investor psyche. The wounded investor may take a 10% pull back but not twenty. That is bear market stuff and this ponzi just won’t survive. If you think those flows that are just now coming back into mutual funds will continue or resume……you can forgetaboutit.

Maybe I will be wrong….but I will stay with my thesis on QE 3….How they implement it will require some manipulation of the market but when and how much…..I guess we’ll find out.

I’m still in the energy plays and miners…….If you’ve made good coin this year then I suggest that you think about moving into cash over the next few weeks and looking for some better entries. Silver and Gold still have some room but remember they will take hits too. I believe that both have a real nice run above this level this year. The question is when and I just can’t tell you that. My best guess is Silver busts 40 near term and gold breaks 1500 near term. Only a guess. Energy looks good for another couple of weeks……gl

update I… http://us.mc562.mail.yahoo.com/mc/welcome?.gx=1&.tm=1300908838&.rand=59c9bk58k72ie

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