Market Thoughts- BIG PICTURE

First of all how about that SKF play again, up 30% in two days, we have the ticket on that one and we continue to rack up on it as a retirement account play.
Tonight I would like to talk about last week and stress that we are in a very crucial time for the future of this economy especially to lead on a global basis. The regular person has no idea what is going on but I will try to explain as simple as I can what is happening behind the scenes.
Firstly, last week decision by the FED was spun by the media as some miraculous move as we should now have lower rates on mortgages, car notes etc, I am here to tell you what they did was a desperation move as things aren't getting better but worse in the credit market. The purchasing of mortgages and car notes by the FED proves that the credit markets haven't improved much since the $700 Billion bill was approved. The FED action was the last resort to defend our debt without the Chinese, Germans and Japanese losing ultimate faith in it as a long term investment. Last week the Chinese finance minister said what I have feared for the last two years, that they will slow the purchasing of Treasury notes as they think the US deficit will unravel the economics of the strong dollar asset. This is MAJOR bad as the US is only operating on borrowed funds from the Chinese, Germans and Japanese, without them purchasing our treasury notes we will be unable to run the government, YES folks the power of our economic future is not in Washington as most might believe but it is in our debt holders mainly foreign countries. They call the shots here and this is going to play havoc on the global political landscape very very soon.
The FED had no option last week to do anything to interest rate because rates are virtually ZERO, so this move was its only option. Now I am a strong believer in letting the system work out its kinks but politicians seem to think they should have some say in economics when they shouldn't. The FED action is going to cause massive inflation and the collapse of the US dollar, if you dont believe look what happened after the announcement last week, gold turned around $70 higher, oil went up $5, silver rose and bonds rallied over $5 in 10 minutes, something I have NEVER seen in all my years trading. This is just the first sign of coming inflation and why the market if it rallies means nothing because the declining value of the dollar make investments here less attractive than foreign investments. The only saving grace now is that the whole world is slowing down but as I said before, the countries that have little or no debt will come out of this slowdown as the new economic powers of the next global economic boom cycle.
I have no idea what will happen here intermediate term but long term we are functioning on borrowed time. This is why we have to set our investments on the declining dollar (so invest in commodities that are dollar based), metals and the shorting of the treasuries notes which right now is developing into a bigger bubble than the housing market was.

This week is do or die time for both bulls and bears. The bulls must reclaim the 801 area early (before tuesday) or defend a decline around the 733-739 area. This area must hold or we will more than likely test the March lows in a rush BUT I will be a buyer yes a BUYER if this scenario presents itself. My bias here is to the short side as I believe we ran too hard too fast and must relieve some of this overbought pressure.
Lets take it slow and see which way the market tips its hands but anyway it does it should provide ample opportunities to profit from.

Trade call here- SHORT GS-

Hope I feel much better this week, my sinuses are just a living hell. Have a great week


MARKETJEDI