I'm not gonna try to short this market yet but I'm not going to try to go long yet either. I started looking for entries to start building positions but it felt like I was trying too hard because I was. I've only made one trade the past week & a half and got shook out of that from trying too hard. I only have one trade on and the catalysis for that trade is coming Friday. If it doesn't move as expected I'm out and will be flat going into next year.
Republicans are hell bent on using the economy to make President Obama look bad no matter who else gets hurt. On the other side President Obama missed his chance to really bolster the economy early in his presidency when he had a democratic house & senate. Instead of focusing all his energy on the economy he wasted a huge amount of political capital on the health care bill. This was because he felt that once republicans got one of the branches back his chance for health care reform would be gone forever. What he & his advisers missed was the fact that republicans can & will dispose of the bill when they get a chance be it now or 4 more years from now.
The economy on the other hand looks to be on the verge of another pull back that could lead to a full fledged recession. With the S&P 500 trading @ a 20 p/e ratio and earnings cooling off this has the potential to get ugly really quick. Even with the US being the prettiest girl in an ugly contest it's no consolation if we're only down 40% when the world is down 65%. Absolute returns rule now. That relative performance stuff means little these days. People are raising cash and that's it.
I'm not shorting because it wouldn't take much to move this market. A headline out of Europe, rumor or truth can send us flying. Thing is, those blokes seem not to have a clue. Larger ECB bond purchases is the key @ this point but it seems like it's a no go. Without the cooperation of the EU the Fed's ability to prop up the economy is limited as hell. The EU combined is the biggest economy on earth, if it goes into free fall we mine as well let it all fall and start from scratch. Let the market find a level on it's own.
This would hurt a hell of a lot @ first but after the smoke clears a lot of problems would be gone. They would flow into the sewer with the blood and cartilage. There would be no more Occupiers, no more bickering between republicans & democrats, no more too big to fail banks, no more 99% or 1% just all of us 100% fucked, and best of all no more EU debt crisis. A clean slate and nothing but opportunities left.....