Saturday, June 04, 2011

Jobs And Stocks On The Down Trend

Stocks have been headed down for a month.  Culprits abound.  Blame the coming end of QE, which quant traders program into their algorithms as a sell event.  Blame a very weak jobs report, which should smash any statements that the economy can generate jobs from more fiscal stimulus.  Blame European difficulties in cobbling together a Greek rescue that will keep stress-tested banks from turning over. 

I was premature when I called the peak of the markets at the end of summer 2010.  I didn't miss much by keeping a big chunk of my net worth in cash since then, with some exposure to China, gold, energy services, and one merger arb play.  Calling a peak now is tempting but I've learned my lesson.  Waiting patiently for a market decline and new bottom will prove more satisfying.