Hold the Fort

If you've had the fortitude to stay the course to this point, hang on. Despite the ramblings of one, Ben Bernanke, our hapless Fed Chief, the market appears to be reaching its bottom. I have to question whether the government efforts have actually had much effect. But, I'm certain that Bernanke not keeping his wild comments in check are causing harm. 

Regardless, it would appear that most issues are oversold. Which sectors are ready for investment is not clear, but the broader financial market (XLF) appears ripe for the picking. I'll post other tidbits worthy of consideration as they appear, but moving cash back in to the markets appears to be a wise move. I still recommend a hedge with UUP since the dollar is gaining nicely on the currency stage.

The choppy markets will continue, but expect some generally upward moves from week to week as money pours back in. I would expect the retail season to be very weak this season. Much of the retail stocks are already priced for bad news so the market should not be impacted dramatically. However, the retail weakness will create a vacuum that could finally push us into recession if the taxes are increased anywhere. Beware all tax increases and bond issues like the plague. This blog is not designed to be political but any proposition involving bonds should be sent packing no matter the bleading heart cause the ballot measure claims to benefit. Our proverbial credit cards are maxed and more borrowing will tip the scales in the wrong direction.

For the short term, expect some very nice spikes in the market, but brace for big corrections as well. If you have the stomach, index options could be a very lucrative play these days.