Monday, 27 April 2009

Commentary: Your source for news, commentary, and stock info

Truth under the radar

There was an article over the weekend on Bloomberg.com talking about how insiders are unloading their shares in this current rally. If you only get your news from the mainstream media, then you are not likely to believe that everything you believe is propaganda. I’m here to tell you that all mainstream media is propaganda and spin. Occasionally, you will get shreds of truth mix in together with what the mainstream media wants you to believe. Every now and then, news will come out that is true but people don’t react to it. The article on Bloomberg is one of those truths. It talks about how insiders are selling shares at ”the fastest pace since the start of the bear market.”
That’s all you need to know right there to figure out what is happening in the market. The true insiders are selling, not buying. Why? It’s because the market is going lower and they are using the bounce to exit positions. If it was the start of a true bull market don’t you think insiders would be buying? These are the founders, CEOs, and executives of major American companies. You don’t think that their access to information helps them make investment decisions. Of course it does. The current rally has been sharp, but I said that we would see a rally in late February. I think this rally is going to fool a lot of people because there really are some people out there who believe that the worst is behind us, and the recovery is on the way. There isn’t going to be a recovery, but that doesn’t really matter. The stock market dances to its on tune. Right now, we are going up (without any logic for it). And if we are going up, you should be long. But my caveat would be that this is a bear market rally, and you must play it that way. There are a handful of reasons of why I think this rally is bogus, and eventually will be met with even greater selling. Make as much money as you can on the long side for the next few months, but be ready exit everything on the ensuing decline. I would say sometime in July-August I expect the rally to end, when reality hits that there is not going to be a recovery in 2009. Funny thing is, at the start of January 2008, the same pundits were telling us that the economy would recover in the second half of 2008. It never happened, and it’s not going to happen this time either.

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