"QUALITY OVER HIGH BETA"

THE BIG PICTURE LINK so less bad is good, good may be real good.

A lot of firsts in this rally off the MArch lows, with so much of the volume coming from program trading, it is sometimes hard to discern where the buying is coming from, especially with such meager amounts coming from the avg Joe into his mutual fund portfolio.

There has been NO major challenge to this rally so far, many calling this a NEW BULL MKT and adding the Recession is likely over. SIgns of strength include ROBUST sales of new cars iN China, an amazing amount of STIMULUS has been applied, and usually at SOME POINT you don't fight the FED.

All this talk about Bank regulation IMHO is just talk, as long as the market continues its rally, even if from money borrowed at ZERO % and highly leveraged play which ends in HUGE Bank bonuses....it's all talk...what mostly this ADM is about.

It may be time if long to reduce exposure to high beta momo plays and consider more high quality companies with strong cash and those who have weathered the storm best so far....in most cases you aren'y going to recieve a meaningful dividend.



If market should begin to stumble, we will have SUPPORT areas to go over to see how it reacts and if any REAL SERIOUS SELLING and FOLLOW THRU develops.

For now, the market doesn't appear fragile or ready to roll over. NONE of us can forsee and unseen, unknown event that could move the market.....and crashes are RARE EVENTS.

My main bone of contention for a LONG TERM BULL MARKET is that no meaning ful reform of the financial system has taken place, and that TRUE valuations are being HIDDEN because of the drop of the Mark To Market Rule. WOuldn't it be great if we didn't have to OWN up to mistakes, and could show our compnay in better light if losses could be hidden off the books?

Problem is, big got bigger, and change that could lead to a freeing up of the credit markets and to investment haven't been made. We have a pattern as I have shown of contracting credit, we need the opposite.

Keeping this toxic "assets" on the books but not realizing their losses or drop in value from 90% of face, could be a MAJOR reason why the credit system is not working like it should, also BANKS will not be a free and open to lending as before, not going to take too many chances.....you have lousy cash flow, then STEP AWAY from the teller window, good chance the Bank is not going to help you.

We have at LEAST 7 MILLION fewer Americans employed and the demand they would have added to our economy is being made up in some part by Government Spending....IMHO creating even greater imbalances in our economy.

How do we get Americans working again? WHat if Consumers are going to SAVE MORE, meaning SPEND LESS....when our economy is 70% Consumer spending oriented?

Is the market pricing in too much blue skies of which there are not or does it see something I do not?

A REAL DISSCONNECT to realizing this new bull market is the picture the long bond is telling.....watch yields, watch the US $....for any unusual breaks.

Lots of data this AM. ALSO A new RECORD in visits to my blog 328 yesterday!! I understand that no one can be right 100% of time, I am not anyone's financial planner and always suggest you consult with a good one before doing anything. Others here are big boys and girls and trade ofr living, so you already are doing your own thing. But I will continue to make this an interesting place to come and do my best to offer something of value and the larger my following grows, the more pressure I feel to deliver for you.

I could easily change my focus and turn this into a stock picking sight, and only talk about my trades, but that can be seen as self serving when done after the fact....I rather let you continue looking into my thoughts and charts and my hope is for those not already doing so, get you to think about what is going on instead of just being caught in a swirl of activity.

YES, one can be fundamentally BEARISH and STILL make money trading long.....I will continue to present my point of view, that's why I'm here and I hope to continue offering something of value that keeps you coming back, this has been long journey for me and a lot of effort.

I've been accused of being SHORT, I AM NOT SHORT the market, but I am not long either. I prefer at this time for my OWN personal reasons and objectives to be on the sidelines PRESERVING CAPITAL, this is best for my OWN situation, others have taken this the wrong way.....Gold has been offering many some good trades last few months....there is perfect example of how to be long in a Bear mkt, now with ONLY 3% US $ BULLS.....and it may not matter but the odds do not favor a HUGE move up in gold under this backdrop IMHO.....as my trader friends already know USING STOPS will CUT LOSSES and PRESERVE PROFITS

Good trading to all, and best of luck f under stress in the economy I wish you well and hope good fortune is coming your way.

Duratek