The Service Bomb

Didn’t I just rant about this yesterday?

I said “We’re in a bear market, right?”

So today I walk into the office (sadly, with no coffee in hand) and ask Rick Pendergraft what the futures look like.

Rick is a chart addict. I can’t imagine that he sleeps without dreaming about charts and the market.

Anyways Rick tells me the futures are lookin ugly.

How ugly? Well the S&P is down nearly 21 points. And the Dow is down 136 points.

This time, the drop was because of the ISM nonmanufacturing index. This is a report that tells you whether services in the US are expanding or contracting. Any reading under 50 means contraction.

Well analysts expected 53. And it came in at 41.9!!!

This is big because we are in a service economy. Services make up around 2/3rds of our economy. If that sector is in contraction, then our economy is contracting along with it.

As much as you want to hear the positive, you can’t deny that we are just now getting into a huge bear market. If you don’t position yourself to take advantage of it, or if you can’t change with the times, you’re going to have a hard time making money.

Me, I’m short the market right now. That’s right, this ‘suckers rally’ that just came around only made me get into more shorts. I didn’t use it to buy ‘great deals’. That’s because the deals we’re seeing now will get much better in a few months.

But we do have a lot of retardedly expensive stocks on the market. And I’m using this opportunity to short the ones that are just starting their downtrend.

Since this is going to be a hectic day, I’ll be back to inject my bear market thoughts every once in a while.