Monday, September 05, 2011

Shorting Europe and Obama

I'm expecting another down week in the stock market.  Already, the European markets are down significantly.  And President Obama is scheduled to give his jobs speech on Thursday, September 8, 2011.   Personally, I don't expect anything new to be said.   In fact, I expect more of the same old, same old.  Recall, the Obama administration has stated that their policies are correct and on track.  After all, President Obama has been "laser focused" on jobs for the past two years, hasn't he?
If there is a stock market run up to President Obama's speech,  I will be selling the few stocks I have left into the rally.   I may even short a few stocks.   If there is a decline, I'm still mostly in cash and will wait for a break below 10,200 before putting money back in the market.

Here's why I think this will be a down week:

  • Europe is looking uglier.  To me, it feels a lot like 2008 when key U.S. investment banks were on the verge of failing for most the year.  Then Lehman failed and the crisis began.  A European country, such as Greece or Italy, defaulting would probably have the same effect.

  • Talk big, deliver small.   Obama's hallmark is to speak using platitudes that sound insightful.  However, when it comes to specifics, the actions are small, almost meaningless.   While this approach worked well for candidate Obama,  President Obama's  talk big, deliver small speeches have not given the markets, businesses, or individuals much confidence.    To me, Obama's jobs address will be another talk big and deliver small speech, with the appropriate decline in the market on Friday.

  • For now, I think the only thing that matters to the stock market is results.  And the results aren't looking very good for either Europe or President Obama's policies.

    For more on Strategies and Plans, check back every Monday for a new segment.
    This is not financial  or investment advice. Please consult a professional advisor.

    Copyright © 2011 Achievement Catalyst, LLC

    No comments: