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How Desperate is Gov'ment



June 23, 2011 – Comments (1) | RELATED TICKERS: SPXU , EXAS

Bernanke gives a stagflation forecast but says there's not much he can do anymore.  The IEA initiates release of oil to lower prices to stimulate the economy.  Congress can't agree on anything.  I'd say pretty desperate.

The bottom line is that we have a very strong demographic head wind in the economy globally and it will last for at least several more years.  I have forecast we don't see ultimate upward inflection points in economies and markets until around 2017-2018, until then we are firmly in the grips of a secular bear market.

Remember when buying and selling that TrimTabs found that about 88% of this market run up from last summer was due to the FEDs intervention via QE2. 

Our largest holding right now is SPXU at 18% of portfolios and growing.  1080ish on the S&P 500 seems very possible.  We also have a position in QID at 6% of portfolios.  I am holding through the trend break, but not speculating once the trend breaks.  We had a 4 week confirmation the last week of May, which is when we took the inverse (short) positions.  We will see if the trend accelerates of peters out.  If it accelerates and goes through about 1200 on the S&P 500, then 1080 becomes the likely target.

While a Foolish 100% invested idea can work in a bull market, people need to remember that we are in a long term bear.  Hence, tread with caution.  Don't risk money you need for income in the next several years.  I still love EXAS and am somewhat infatuated with SOLR and GMO as very aggressive plays.

I don't update here often, however, I am using FB fairly regularly now.  Feel free to like the page:

Good luck and keep safe.


1 Comments – Post Your Own

#1) On July 15, 2011 at 4:27 AM, MyunderratedLife (95.07) wrote:

Are you still buying EXAS at approximately the current price?

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