The question is ????

DJIA 10068 -376.36 SPX 1071.59 -43.46 Nasdaq 2204.01 -94.36 VIX 45.79 +10.47 Gold 1188.60 -4.50 Silver 17.69 -.03 Oil 70.14 -.66 RBOB(retail gas)1.944 -.02 Nat Gas 4.10 -.033 DBC (Commodities)21.26 -.45


Dollar Index 85.68 -.02 EURO 1.2593 +.0133 Brit Pound 1.4408 +.0064 Aussie.8335 +.026
IEV(Europe Index 32.08 -1.04 EEM (Emerging Market Index)36.16 -1.89 EWZ (Brazil)57.63 -3.94 FXI (China Index)37.02 -1.34

TLT (LT US Bonds) 98.33 +2.03 IEF (7-10 yr US Bonds)93.39 +.90

GDX(Gold Miners) 47.04 -2.40 IYR (Real estate)47.24 -2.40 (XLF Financials) 14.24 -.89XLE (Oil) 52.16 -2.44 XLB (Materials)29.64 -1.41 XRT (Retail)38.92 -1.05 XLK (Tech) 21.31 -.70 XLV (Health care) 28.73 -.83


The pros are trying to figure out where to buy. What does that mean? It means that they are not afraid of this correction. They view it as a pullback and are looking for buying opportunities. Here are two articles on that subject

The first is from Cramer:

As bad as Thursday was for the markets, with the Dow plummeting 376 points and the S&P 500 losing almost 4%, Cramer still isn’t bullish on most stocks.

“It just hasn’t come down enough to make buying compelling,” the Mad Money host said, “or even particularly secure.”

He likened the Dow to a stock. If any other stock soared to $11 from $6.50 and then pulled back to just $10 – which is the same track that the index has followed since March 2009 – most investors would wait for it to dip to $9. And that’s just what is happening now.

“We’re barely down for the year,” Cramer said. “Despite the grinding agony of the action, we’re hardly in anything called bear-market territory, down just 10% from our high. Frankly, it’s a totally normal, run-of-the-mill correction.”

He might take a different approach if the market leaders that worked after that March 2009 bottom – oil, banks and tech – were working now, but they’re not. So we’re in a bit of a “no man’s land.” Stocks are down, but not enough to make them attractive. In fact, he’s only recommending accidentally high-yielders for the time being.

They won’t be attractive either, Cramer said, until “something truly bad happens,” meaning European governments and banks finally capitulate and that situation is resolved. Once we get that, though, “You cannot be as negative.”

3M [MMM 79.58 -2.96 (-3.59%) ] serves as a perfect example. The stock yields only 2.6% and trades at 14 times earnings with a 12% long-term growth rate, a slight premium to growth. It isn’t particularly cheap, and the uncertainty in Europe and China could mean the earnings estimates are too high.

When will triple-M be a buy? Not until the yield crosses 4% or it trades through that growth rate. Also, Cramer said he wanted to see proof in the charts that the stock has held at this level before. And, most importantly, we need those bad events to happen. Then the odds will be better. Until then, you can afford to wait.

“We’re still in no man’s land,” Cramer said. “No reason to get aggressive


Cramer calls it a run of the mill correction and says we have not come down far enough to make buying compelling. Notice that he never mentions that he has sold or that selling is something the reader should do. He is saying not to worry but don't buy yet. He is also saying don't buy here which makes me think that we have a rally comming.

The next article says:

How Low Can the Market Go? Pros Say Slide Hasn't Stopped

With technical barriers continuing to give way and the May 6 "flash-crash" fluke looking like not so much of a fluke anymore, market watchers were left Thursday wondering how much worse things could get.

Forecasts varied substantially but few thought there was much to stand in the way of a further move down that would bring the major indexes officially into correction territory, or 10 percent off their most recent highs.

Standard & Poor's said the correction could total 15 percent by the time all is said and done, sending its benchmark S&P 500 [.SPX 1071.59 -43.46 (-3.9%) ] to the 1035 range.

Others weren't quite so pessimistic, but worry seemed to be the word as a confluence of bad news proved a toxic mix that ended a powerful 14-month rally.
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They are worried about the correction but are saying that we correct 15% from the highs which is only another 5%. Again there is a mention of a correction but no advice to sell. They also say don't buy here which agbain to me means we may have a rally now.

What has happened is that the experts have been caught long and are trapped. They have not capitulated but are looking lower now. They are looking for the low not looking to sell their long positions.

Cramer is looking to buy accidental high yielders. I find that very strange coming from him because that means that those stocks would have to completely broken down technically for him to buy. Most professional traders would never buy a breakdown.

That would mean that he would be looking at buying something that is "cheap". Cheap stocks are not winners. They go from cheap to Oh My God! before they bottom. Then they ream you out and stay in the doldrums for a year before they can rally. This is a departure from Cramers stick where he normally buy the hot stocks that have high growth rates and buys the breakouts.

The current message is that Europe is to blame for the sell off and I think if there is the appearance of a solution for Europe they would all feel much better. The VIX is at a healthy 45.79 so it would not surprise me to see a rally soon especially when the "pros" would not buy here as the two articles mentioned. I see alot of stocks back to their July 2009 breakouts and if the DJIA does the same thing that means 8800.

The fact is that the longs are trapped and are praying for the correction to end but are not selling. That means this thing has more to go. This "correction" is a resumption of the primary Bear market that started in Sept of 2008. The bounce is over and you would expect a retest of the lows of 2009 at 6600.

I am not hearing the "Pros" say this now. They are saying to buy lower when things settle down. The "Pros" are not giving us a drop dead number. When they are ready to bottom this thing for real they will give us an urgent message to get out and save ourselves.

They will tell us that we could sell off significantly and tell us if we drop below a certain number that there will be blood in the streets. That will be followed by 5months more of a sell off. During that 5 months the world will be coming to and end. The public will be completely fed up and dump there stocks. That is what you hear at lows not buy accidental high yielders. That is like buying a Mercedes after it has been totaled in an accident. I would like to buy one but not cheap after a crash.

We are no where close to this now. We have just had the kick off to this sell off. They are not telling us our economy is in bad shape and in fact are saying when you get the opportunity to buy a cheap stock do it. Remember what Mikey says about cheap. It goes to Oh My God and hammers you for 1 year before you buy.

Stay in cash and be safe because prices have a long way to go in terms of price and time before you should buy anything. Don't chase any near trm rallys. Cash pays less than .25% but that will out perform stocks, corporate bonds, and Muni bonds, which I think are going to be disasters.

Mikey