CHESSNOID

The stock market had its heart broken on Valentine’s day and its 3 day winning streak engagement was called off. Actually, the last few days the markets actually advanced very well. It wasn’t really responding to the news as you would expect. Even today, I didn’t know which way it was going. I read as much as I can about the markets and even though the technicals are indicating they are still trending down, it makes me wonder if I could be interpreting the numbers wrong when the market has substantial rallies. I don’t owe any stocks, but this is the time when I am waiting it out till I get the signal to get back in.

I found this really cool graph at Fortune.com that shows the market swings in a 50 year period of bears and recessions. The longest bear market was 929 days long from March 24, 2000 to October 9, 2002. Yes, during Bush’s first term. Funny thing is we are in a second bear market or recession right now in his 2nd term. We will know the official dates after it has completed the cycle. Trust me, this is nothing to be proud of to have in both your terms. If you don’t think he is responsible for the economy, then you are an IDIOT who probably voted for him the last 2 elections. If the economy was doing well, then I think we would have to give him props, but it is what it is.

Everything in regards to the economy has been affected by the mortgage fall out or the housing bust. The dominoes have toppled and everyone seems to be affected. I know we had interest rate cuts and we will have some more in June, but even they have limits. We can’t go below 0%.

We can’t pretend the effects of our interest rates cuts don’t affect other countries currencies we trade with. They have to protect themselves in this global recession, and if the value of the dollar keeps sliding, then they will find other currencies to keep there money in.

I do believe as we get through this part of the business cycle, things will start to pick up. I am guessing we will hit the bottom of the housing bust in the last quarter this year or first quarter next year. I do believe our economic recovery is tied into withdrawing our troops out of Iraq and re-directing the monies and resources back into our country. Hopefully, we elect a new president that can and will do just that. Otherwise, we may be trying to break the bear market record of 929 days under Bush’s first term. If John McCain is elected, then we will definitely break that record because we don’t have resources to stay in Iraq for the next 100 years let alone the next 4 years.

I am still all in cash and avoiding equities until I can stomach the risk and triple digit moves. If you are long in stocks, just be careful to minimize your risks by diversifying and keeping some of it in cash assets. According to NBC:

The Dow
DOW JONES INDU AVERAGE NDX
.DJIA

12376.98 -175.26 -1.4%
Dow
Quote | Chart | News | Profile | Add to Watchlist
[.DJIA 12376.98 -175.26 (-1.4%) ] closed with a triple digit loss today, the 20th plus/minus 100+ point move of the year.

20 triple digit moves of the DJIA in 31 sessions

* 9 up
* 11 down (counting today)
* Biggest Gain +299 on Jan 23
* Biggest Drop -370 on Feb 5

This is the most 100+ moves ever in the first month and a half of a year. The previous record for the same time period was 14 in 2000.