Market Ruminations

I haven't done a Market Ruminations lately. There are several reasons for this. We were on the road with the RV for the better part of a month so I lost focus. I got stopped out of my last bet which was UUP the dollar index fund which left me out of the market and in cash. I can't seem to get in the zone to make any money lately. I know the market is rigged by the Fed but still one should be able to catch a wave now and again. The Fed has become ever more involved in the markets and the economy mostly to the detriment of the middle class. I could make a good argument that everything the Fed does is designed to hurt the economy but that's a story for another day. Fed involvement started under Greenspan with the Mexican Peso bail out in 1994. In the process of doing this the Fed short circuited a looming stock market correction and the market took off again. Then in 1998 they bailed out LTCM which also bailed out our own stock market and once again we were off to the races. Finally in 2000 they couldn't hold back the rising tide and we had a major correction. Since 2009 they have had QE1 and QE2 and I expect QE3 will pop up as soon as the market corrects 10% or so. It's hard to make money in a market rigged against the middle class and structured to favor the big banks and Wall Street. However it's not impossible and I had a good year last year and hope to have a good year this year if I can start catching waves. Ok, so much for history 101. What do the sacred chicken bones prognosticate for the rest of 2012. Here is how I see it playing out. The market is poised to hit a downdraft. This will be met by QE3 which will prop up the market till after the elections. The downdraft looming in the near future may be too short to play it short so I may stand aside on that one. The market should stay positive for the rest of 2012. In 2013 and 2014 the government will finally get around to addressing the problems of our fiscal idiocy and trigger a recession in 2013. If Obama is elected he won't care as it will be his last term. If Romney gets elected he won't care because he will be able to blame it on Obama. The Fed won't care because there won't be another election for another 4 years. 2013 and 2014 will the trade of a lifetime shorting the market. But, that is off in the future so the question is what do we do now. It looks like we are back to UUP being the lynchpin of everything. It the dollar keeps going up Gold and the Stock Market will go down. I may try to short the Gold market and the stock market. If the Fed can muster the firepower to trash the dollar Gold and the Stock market will go the other way. I am suspicious the Fed is running out of ammunition and there may well be a QE3 party and no one will show up. Right now my trigger finger is itching to place a bet with some GLL which is a short of Gold and DXD which is a short of the Dow fully recognizing this would be a quick in and out until the Fed makes it's move. There is a full moon tonight so at the stroke of midnight I will draw a circle in the dirt and throw out the sacred chicken bones. This should reveal all give me a sense of direction. More to come.