Thursday, June 12, 2008

Nothing Important

Another wild wild day in the markets today. Get used to it for a little while. The world is great trade is now gone and until it returns there will be huge pushing and shoving by the bears and bulls as investors try to find which way is the right way.

Corn set a new record again. No surprise there. It is very possible at this point you could see $8 or $9 corn and over $10 if we get a scorching July.

CPI and Michigan sentiment numbers will be out tomorrow. CPI should be scorching and be especially hot because of all the seasonal adjustments that were in the last number that made it false. You should see some catch up on the back end. Sentiment, well it will just be bad.

At some point we should see a pause from downward movement in stock prices but my guess is we are not there yet. We haven't had that huge volume whoosh day where you know people have thrown in the bag. In general there is very little I like. Meats which I have talked about and inferior goods. A couple one off value stories but for the most part cash will continue to be king. There are just still to many bulls out there having a huge disconnect of acknowledging problems in the stock market in one sentence and somehow coming to the conclusion that it won't transfer over to the economy. Now you have rates rising with the 2 yr, 10 yr, and 30 yr all making meaningful moves higher. Who knows where we go in the short term but three to six months out can we really be higher? I still think the time to buy financials will be spring to summer of 2009. Maybe by then people will stop trying to call bottoms which means the good contrarian bet is that we finally have a bottom.

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