Not much happening for me lately in stocks. I am still bearish on the S$P 500 and still buying SPXU. Do you think there will be a sell off in the markets?
I am still holding my SPXU position as I completely agree with this video I just saw on my CNBC app on my iphone. It expresses concern and a bearish outlook if the S&P 500 climbs around the 1350 – 1365 levels.
I have absolutely been shocked by this rally in the markets. I think the pull back could be just as sharp as the climb and that is why I have been dollar cost averaging into the SPXU ETF as the markets have been climbing. I am just sitting tight and being patient as I feel this pull back will be real at some point and am willing to wait for it.
Here are a couple facts and reasons I just do not feel this sustained climb in the markets is justified.
1) Europe is in a recession and still having real issues with the inevitable Greece default and instability in their economy and markets.
2) U.S is still in $15 Trillion plus dollars of debt and with no clear plan still to reduce it. Only talk of increasing the debt ceiling again.
3) When interest rates rise on $15 trillion of debt this will cause tremendous pressure to reduce the budgets.
4) Defense spending will have to be cut as well as other government programs. Ripple effects will be huge when layoffs start in the defense industry and through the suppliers.
5) More baby boomers retiring and pulling out of 401K and retirement plans thereby reducing inflows into stocks.
These are just a few key items why I am still bearish on the markets. Sure we are getting a short term bounce in the markets, but think the true picture is not good. At some point the reality of the U.S huge debt load is going to have to be dealt with. When this happens and true large cuts are implemented to balance the budgets and then to dig into current giant debt loads, this economy will potentially have to slow again.
Sure, tons and tons of money was pumped into our economy and everything looks rosy. I still feel it is an illusion and being pumped up by the media. Things seem stagnant and remember there is an election around the corner so all this good news makes for a positive for the elections. But, once people see through this and look at the realities of the debt load our country is burdening our citizens with as well as the problem of how do you grow an economy that is so far in debt and needs budget cuts, I think the markets especially the S&P 500 will pull back.
Time will tell. I am long Long SPXU. Listen to the video below as it gives some interesting technical analysis.
Quote from Video: Earlier we spoke about the s&p 500 maybe rising. are the technicals backing that up?
Marianne joins us. as i recall you were bearish on the s&p 500. where do you see the markets going this year?
“We are bearish”
