Cubes Update

The Cubes (NASDAQ: QQQQ): 6:35 AM NYC time, September 11th: Just a quick post as we get back to work after summer holidays. And of course today we remember our friends and loved ones who have been victims of violence. Today I’ll try to refrain from saying anything negative about Bush, the greatest failure in American history, the confused and stupid man who’s source of power is lies, fraud and fear. If there were a negative Noble Peace price, he would win it. Oops, oh well! Now onto the Cubes.

Nothing new to report other than we’re going on a month in a 1-point trading range between all the important moving averages: 20-, 50- and 200-day. Looks like a failed breakout about on Tuesday, with volume accelerating for two days on the downside and volume receding on Friday’s weak bounce attempt.

Sentiment is somewhat negative, which actually makes a rally more likely, but I am not in that camp. I am in the “sentiment is negative and rightfully negative” camp. Here’s why:

1) So far the only volume that has come in after the summer doldrums was volume to the downside.
2) More and more people are realizing that profit margins have peaked, the housing bubble has burst, the consumer is in the early stages of retrenching, the yield curve has been inverted for a while now, after first inverting nearly a year ago.
3) To me it seems likely that the only people holding out a lot of hope are the same people who last year and the year before didn’t see the real estate bubble popping or the Bush’s fraudulent Iraq war failing so miserably even before it started.

Of course, if enough people live in fantasy land then that fantasy land becomes a sort of reality, so we will see, a rally is still possible, but if it happens I will be looking for the reversal to put on short positions. Until then, my only holding small positions in a few stocks and currencies. The rest happily in money market accounts earning over 5%. Cheers!

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