There goes the free market…

Short sellers are getting blamed for collapsing stock prices…how then can they explain the Shanghai market, which does not permit short selling and yet has collapsed from 6200 to 1900?

When oil prices are too high, blame the greedy speculators who keep buying.  When stocks fall too much, blame the greedy short sellers who keep selling.

If the government likes price stability so much, perhaps they can ban buying and selling in all markets.

Idiots.

Regardless of the outcome of the bailout for the financial markets, this is good news for gold, oil and other commodities in the long run.  (Edit: Included a simple chart of SPX; I suspect a fibonacci retracement of 61.8% or 78.6% may occur)

As for the markets, the US is a shithole and the US dollar is in a secular bear market while commodities are still in a secular bull market.  That doesn’t mean the US dollar can’t rally further or that commodities can’t continue to fall – at least in the short to medium term.  Despite that, if you’re looking at the long term, continue to look for opportunities in any areas OTHER than toxic turds like US equity or financial waste.  You’d have to be fucked in the head to believe that the Fannie Mae and Freddie Mac bailout announcement awhile ago will help retarded US lenders and borrowers in any discernible manner.

Side note, I’m preparing to dip my toe into gold investments.  Not necessarily gold mining stocks, but rather gold bullion funds.

My holdings have changed since I last posted. I’ve now got 30% of my money in a term deposit, while the rest invested in agricultural and energy stocks which have performed very well recently (IPL, QGC and OSH). I also own AQP (platinum stock), and that has held up ok as well (until recently). These stocks all have trailing stops on them. As for the stocks purchased late January? With the exception of AAX, LEI and JET (which were all sold for a profit), all the other stocks I bought earlier in the year were dumped for modest losses…

After almost 6 months have passed since the start of 2008, I thought it would be interesting to look back to what I was thinking at the start of the year.

The outperformers in the first quarter or first half will probably end up being oil, precious metals and agricultural stuff. They’ll probably underperform in the later periods of the year as the laggards (financials et al) start to pick up pace. Thus I’ll be looking to bottom pick some financial stocks showing slight relative strength as that time approaches. The only name I can come up with right now is Babcock and Brown. I would not be buying any financials stocks at this point in time though.

Well, energy, agricultural (and to a lesser extent, precious metals) clearly have outperformed…and financials continue to choke on their own vomit. The question is whether the financials will find its feet somewhat as we prepare to enter into the 2nd half of the year. Right now, I’m starting to think that it will actually get worse before it will get better and I’m gonna steer clear of bottom picking in this sector.

For what it’s worth, I will trash my comment about buying Babcock and Brown in the latter half of the year. The stock right now is a downside leader and should be avoided at all costs if you don’t like gambling. This garbage stock may very well print an intermediate term low today given that it has halved in price over the span of a few weeks, however, this thing is an avoid at all costs. BNB could become another CNP, AFG or MFS for all I know.

Check out the links on my blog roll, as a lot of the ideas I come up with come from them. Notable blogs include http://www.bhcinvestment.com/ (formerly trade bursa malaysia –> some amazing calls from its author) and will rahal.

Update at close: Sold QBE at close and bought AAX. Buying growth.

Interesting to note that datawink pattern recognition system is continuing to give weak dow signals.  Check out the post here.

Note that the market is trading at the 5 day EMA.

Suggests equities might bounce some more.