Financials continue to feel max pain as major banks continue to be hammered by selling. The exotic forms of investment continue to haunt those firms who were careless and did not handle risk properly. Selling has spread throughout the rest of the market as Crude Oil prices race higher. We are also seeing Grains and Agriculture futures point higher as well. These markets have and continue to signal higher inflation. The markets haven’t quite seen a peak in fear, a washout of the markets is highly likely. Along the lines of a washout will more than likely be proceeded by crude oil entering in superspike mode.

The market is in chaos mode and can not be trusted. Financials might continue their trend but the short trade has become so obvious a sharp covering rally could wipe you clean. So few stocks are working to the upside outside of oil and natural gas that you are better off sitting on the sidelines.

The more running in place you do with your account the more likely you will bleed it dry. Often times, many feel the need to be invested and burn themselves out. This market is that type of market where its screaming for the retail investors to feel the need to get in. When the waters are murky, you sit aside because you never know what is lurking in the waters.

We are oversold but these conditions can extend further. This market isn’t fun when perfect looking charts fail. Stick with the small/mid cap oil and gas names.

Posted in Categories: Contributor, External Research, Stocks, USA.