Faltering economy

We are going in a crazy direction right now as far as the economy is concerned. The federal reserve has made some plans but they are being criticized now by the smart boys in the industry and the feds don’t seem to be showing the confidence they need to. The stock market is responding with volatility. People are starting to get worried about their money in the bank, now that we have had an actual run at IndyMac which was partially the reason the FDIC came in and took it over.

Again, I am completely out of the stock market and am waiting for a signal to buy long. In my UpDown.com simulation fund I am shorting stocks and today I was up 7%. Those are good results for me and I am not learning better how to buy in a bear market. In this case, I purchased stocks to sell at a certain price. If the price falls after I purchase it I make money. Of course, if it goes up then I lose money. I am also buying reverse ETFs. My performance has been such that I have been tempted to do it with my real money, but I don’t think I want to take that chance right now with the way everything is.

I think the market will continue to trend downwards for another 2-3 quarters at a minimum. The technicals haven’t changed and the fundamentals seem to agree that the economy is headed south. We now have the DJIA breaking the psychological level of 11,000. I expect we get a good size bounce because the market really is oversold in such a short period of time. Oil fell today but the stock market did not react accordingly. It seems like investors are not sure where to put there money because banks are having a tough time now too. This week is options expiration on Friday. I have no idea which way the market will move, but I don’t really have to worry since I have listened to the fundamentals and acted on them accordingly.

I still have no confidence in Obama or McCain doing any better than Bush. Their plans really do not address how to fix our current situation in the short and long term. Stop saying you are going to cut taxes and stop spending. That is just stupid rhetoric. Tell me how you are going to lower the price of gas at the pump tomorrow and stop the dollar from falling. The only Republican Congressman who ran for President didn’t get proper coverage and was blackballed by the media and the Republican party is the only one who really understands economics and could actually fix our financial mess is Ron Paul. If McCain picks Paul as his VP, then I would vote for him. Here is a video explaining to Bernanke economics explaining where the economy is headed before the financial storm completely pummeled us.