Meredith Whitney Saves The Day

Down 110 points on the Dow Jones and Maria Bartiromo begins to interview Meredith Whitney.  I called my trader in my office and said watch the market here.  We’re going down big or up depending on what she says.  She starts talking about the fact that it’s getting dangerous to short financials.  That was all this dull market needed.  I told my trader watch the financials and the market rally.  Sure enough, we ended at some of the best levels of the day.  She’s a powerful woman on Wall Street right now and she’s been very accurate over the past couple of years.  To hear her sound remotely bullish got the market going.  All in all, it wasn’t that bad of a day.  It started this morning when the futures were up until Michael Mayo, an ex-analyst from Deutsche Bank who has started his own firm downgraded a lot of the banks.  The market was looking for any reason to sell off and this was just what started it.  Down we went until late afternoon when Meredith Whitney’s non-negative comments came out in the interview on CNBC.  I can’t say they were bullish, but just not as negative.  Sounds like the economy doesn’t it.  Not good but not as horrible as last month.

I had my finger on the trigger today to lighten up on some positions but everything just wouldn’t break down.  However, the market remains overbought and I’m becoming increasingly nervous for the short-term.  Just remember how quickly we can go from overbought to oversold.  In just a few days, we could re-load for another leg up.  All the stock market has done recently has been to sell off for two days.  But, the two days have been violent sell offs, 4-5%.  That does a lot to work off the overbought condition.  I still believe earnings will be the catalyst for a potential market fall later this week or next week.  It won’t be as if the companies will be telling us information we didn’t already know but that will be the excuse for a pullback.

Gold Update

Gold continues its sell off and is sitting right on its 200-day moving average.  A break below that and we could be staring at $800 per ounce very quickly.  If you’re short gold, get ready to cover soon.

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