The Day that Was - August 13th 2007

Today the trading in the markets was completely void of courage on the part of buyers. The market started up right after the bell but all through the day is was a slow bleed as more people just kept quietly taking money out. We basiclly ended right where we were on Friday.

The financial sector gaped up at the open but just sold off as the day went on and the XLF (Financial sector SPDR) ended the day lower than the close on Friday. Even with the sense of a calm in the markets this morning as events in the Asian markets overnight seemed to be tame it still was not enough to provide any confidence in our financial markets yet.

The charts have been and still show the potential for more significant downward moves in the broad market. The analysts will still keep saying (and a complete disservice to the average investors) that the fundamentals of the economy of the country is great. But that is there game. They have too much to loose in a recession and will say that everything is great all the way up to the point their voice creates bubbles on the surface of the water as they keep going down.

When the markets look healthy I say it, when the markets look sick I say it. I am not a bull or a bear. I just report what the charts say. If there is no intervention by the FOMC or other major news to change the greed/fear ratio as it stands right now then the charts will remain intact and that is a slowing economy that will start reversing.

We still have some rough days and weeks ahead (hopefully not months or dare I say years) but the current course is for a weakening economy, regardless of what the Ivory League economists will tell you. Follow the charts and you will protect your capital in an up market or a down market.

EXM reported their earnings tonight and they beat expectations very nicely. Keep watching EXM for the first buy point in the newsletter.

BDCO is being removed from the watch list. They reported earnings tonight and they were lower than expected. This never became a trade so nothing lost.

Tomorrow is another day and another opportunity. .