DJIM #4, 2010

It's sad!   It actually pains us to write a weekend Journal after a week we just had where Wall Street became a Political target.    What started as tightening worries from China turned into anything but ordinary toward the end of the week .   We are definitely not alone to criticize the recent events that took place at Washington.    Everyone from Warren Buffet to Jaime Dimon, some of the best role models in our business, were undoubtedly having the similar kind of dinner table conversations with their friends and family over the weekend.    Honestly, with regard to the dramatic turn of events that have unfolded last week, we don't really know what to say.     We do know one thing though, it's just not right to go after personal "achievement" at the expense of the majority who live and believe in what is known as the greatest free and democratic capitalist society in the world.    So much for the new changes and so much for the promises!    At the end, it's nothing more than a desire for populist measures.

Ok, enough of bashing!   At the end, market did drop 5% in a matter of three trading days off the "wrong" reasons.    Why?   There's nothing but uncertainty revolving around last week's headlines.   Once it becomes clear which event materializes, we'll know then if the sell off is warranted.   Right now, we have faith that people in charge at Washington still have a clue about what's good for this economy and for this market.    Totally writing off this market and preparing for the worst, coming into this weekend, may just be a premature move in our opinion.   However, people have a right to decide what to do and in this case, what to fear.    Their action speaks loudly about how they perceive the danger of this market in the event if last week's headlines do materialize down the road.

At DJIM, we have to take all possibilities into consideration.    At this point, market is resting near the December low of 1090 and we feel strongly that a bounce is at hand.   It's also definitely easier to play rebound off ETFs.   No matter how much we like some of the fundamentals/stories of individual plays/ sectors, we just feel for the sake of any rebound, trading the ETFs such as SSO Q’s OIH are more practical.  We'll get back to smaller plays once the market stabilizes somewhat.   Also, it’s peak week in earnings and we’ll look here for new opportunities.

Last week was as a shock to many, hopefully the coming week will bring some more sense to the on going stories out there.    Be rational, be cool in what will be a very busy week on all fronts.  Most importantly, cooler heads must prevail  with a Bernanke confirmation.