S&P 500: The Short Play.

Well folks, look at the market the past week, were down 4% for the year easy. Now if you read my very first blog "Macro-economic analysis" you would have somewhat expected this to happen after the massive commodity bubble, that came to be/exists. So what can we expect in these times of serious uncertainty.

• S&P falls 147 points in the past two weeks.
• Standard an Poor's downgrades U.S treasury bonds/yields from AAA credit rating to AA credit rating.
• Weak economic growth reports produce fear.
• Investors/ Mangers/Funds loose faith in USD and U.S economy

 It mean its truly been a blood bath this past week. On top of that while everyone is expecting  this "correction" or "bearish run" to bounce off current levels, i tend to find that to be false optimistic bias. We have a growing number of unemployment claims, a failed FED monetary policy, awful global macro-economic issues occurring in Europe and at home, and top of this outrageously high commodity prices, destroying consumer purchasing power to re-invigorate aggregate demand.

Its simple, bond yields have been sky-rocketing in Europe and they will be sky-rocketing here in the U.S as well in time. When yields rise people become pessimistic on our countries financial strength, when that occurs we will see systemic paranoia, and fear induced panic in our financial markets, so expect an average downward trend of our major index's to continue.

Overall i suggest betting against the markets overall trend buy purchasing shares of ETF: SDS
We may see some periods of bullish investors buying up equities at a "discounted price" but that is simply a illusion created by mental accounting, and representative biases. In reality come Monday we should see a drop in the markets...your entire countries credit rating getting dropped on a Friday night cant be good...seems eerily similar to Washington Mutual's Fed seizure back in 2008. The weekend before it dissolved.

Expect serious market movement downwards Monday.


Position: SDS Long