Pre Market - September 4th 2007

Good morning Rebels. I hope everyone had a happy and safe holiday weekend.

And while I am on that subject let me briefly comment on the widely talked about situation of the trading volume (and the lack thereof) over the past week. Many of the news media and others want you to think it has to do with the holiday. That many traders, hedge fund managers, and the like are all on vacation and that is why the volume has been so low. Rebeltraders does not hold the same belief as the media does on this subject. If you go back 20 years ago then the claim about vacations and the low trading volume is valid. Today every hedge fund manager is a cell phone call away from making a trade, a wireless laptop keystroke away from making a trade. Technology today has enabled those in power to remain in power, even if they are sitting on the beach somewhere.

With the markets in one of the most volatile states in recent memory do you actually think that those who are in control of vast sums of money are just closing up shop and heading out for a long holiday? Of course not. Even if they are not in the office they are STILL in control of their investing capital and will move it if needed. Vacation or no vacation.

The lack of trading volume during the previous 10 trading sessions is low because of the uncertainty in the markets. I am still looking for more market sell off in the near term. The markets are not out of the woods and there is more downward pressure still out there. When reading the tapes I still see selling on the strength. Someone is taking money out in bits and pieces.

The charts are footprints of the smart money (smart or not is is essentially the large money that matters here). These footprints tell us where the markets are going. If the volume is light then that means that the large money is stepping lightly. If they step lightly then who are we to try and trade against the ones who truly move the markets.

This morning the futures are down and have been floating around in negative territory. Today we watch for the construction spending data and the ISM manufacturing data to be released at 10:00am. Vehicle sales data will be released throughout the day.

When the market opens today I am adding to my position in Gold (GLD) in my long term portfolio. As I explained in previous commentaries Gold prices have traditionally been a 'safe place' during a recession and on a weakening dollar. Both of which are distinct possibilities in the future.

We are watching the markets and when the time comes to jump in then we will be jumping in and we will hold your hands as we go in to help guide you to the best places in the pool to be in.