Wild Ride

The stock market did not fair well today whatsoever.

Nasdaq decided to undercut its lows on Friday…winners lagged…well, most of them did. JSDA/HOM stayed nicely. Where does this leave us? It leaves us on the sidelines. We just can not try to swim upstream in a raging river. To make it simple. Do you go out in the ocean when there is 30 foot surf? Then why would we want to risk our capital in a downtrending market.

Talking heads are blaming inflation, Liesman was at a grocery store talking up how much groceries have gone up. OIL prices are too high, everything is too high. Again, the FED created this situation when they took short-term rates to 1%. Guess how much liquidity they created??? Didn’t oil go from 30 bucks to 75? Gold topping out at over 700! They had the chance to put the breaks on in early 05…raised by 50bps or even 100bps. But, the legendary Greenspan thought he knew better. Enough rambling…Inflation is TOO MUCH MONEY, that is dollars chasing TOO FEW GOODS. Last time I checked there weren’t any shortages of anything…yes we have supply problems and certainly we have excess cash out there…but we do not have runaway liquidity and a shortage of any particular commodity…

I nibbled at AERTA today. I have a SHORT LEASH on this bad boy. This is the only stock that intrigued me enough to purchase. Its a low priced, unfollowed stock. It has had some big volume on the upside, accumulation! We’ll see, certainly not asking for the pie in the sky.

HOM I took 20% off the table. I think this can be a huge winner, but with the run up late in the day it was far too easy to take some off the table. Again, we aren’t in a bull market, taking profits on big winners like HOM should be taken. I’ll be waiting and watching JSDA to see how this one shapes up. It rallied at the end of the day as well. PRFT I was pulling the trigger if it undercut its 50dma. Other than that, its nice to have a nice safety net of cash stored aside.

Good Trading,

Mkt Spec