The Carnage Continues

Well we are continuing the bear move started last week with the DOW making new lows again. The Q's are still above their Nov lows ($25), but it wouldn't suprise me to see those tested soon.

It was another great week for trading and the equity curves should be on the rise again after a long dry spell. We had a number of beautiful set ups coming into the week that finally came through. FNF, CUB, ATHN, CWT, ASEI, RGLD, GDX to name a few that Dan had provided. All beautiful 5 wave, divergent setups that fell when the market finally broke down. Like shooting fish in a barrel. And the action may not be over yet. Remember patience is the key to squeeze all the money from these moves. Remember AFAM. This was the darling only a few months ago highest rated, highest momentum but when it showed its true colours to us we knew what to expect and look at it now.

The health sector was the latest darling to also take a big hit this week as Obama unveiled his budget that cuts medicare.

The other big news this week was around Citicorp. Speaking of the mighty falling. Look at this stock.

Over 6 billion shares traded last week as the government struggled with what to do with this banking giant. No one else wants it so the government might as well buy it. Swapping preferred for common and diuting shareholders equity was the game. Something like swapping chairs on the Titanic.

The only good news is that the further we fall the closer we are to the bottom. (Unless you are starting to believe the doom and gloomers) A number of the stocks are now sitting in the 5th wave target areas, most of the weak money has left the system and there are some stock values out there that have really over shot the mark from a value basis. Not that I am expecting a turn around any time soon, but the time will come..

For this week I will continue to hold my shorts and for a long trade I may take a stab at USO.