6/26/2011 10:05:03 PM

Hello Everybody

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Trade Actions:

Absolutely Nothing. AGAIN. This is no time for heroes, you go out there. I always liked that line from Butch Cassidy and I think it holds true here. I don't want to be a hero here, you go first. If there was ever a time to sit back and wait, let someone else get smacked around, it is now.

Market Outlook/Potential Opportunities:

Unbold is last week's commentary. Bold is this week's commentary.

Stock Market?

We need to wait for the next topping pattern to sell into. Or the next bottom pattern to buy. We are just stuck in the middle here.

Is a Sell in May and then Walk Away in the making? It sure appears that way. We have two slots open to put those Short Funds back on, but we are going to wait for a short term countertrend rally back up this week. I am looking at SH (Short SP) and PSQ (Short Nasq).

Well I was right that the Stock Market was no place to be right now. Unfortunately I did not capitalize on any Short Funds. After getting dinged a couple of times on early calls for Short Funds I decided to hold back and wait for a better rally to sell into. The one we had two weeks ago just was not enough for me to stick my head out again. Is a bottom now here? I would not be so quick. The SP at 1263 could easily slid another 100 points so I do not want to be a hero here. Nor do I want to get short after a big market slide. Sit back and enjoy a couple of weeks of summer knowing that you really only have one Stock ETF and that is the Solar Fund. Let us see if any 1-2-3 countertrend rally can move up so we can get short.

Energy?

Long term Oil is setting up a very bullish case. Maintain USL as a core holding thru thick or thin. With Middle East violence heating up and the monthly chart on Oil looking good, we have to stay with it. Also we must maintain some position on the inflation front so we have to stay with it. Oil is overextended but looking like it is going much higher. Speculation is not driving Oil higher. The collapse of the Dollar is.

With the fear of Nuclear Energy, it is possible that we could now have a renewed interest in Solar Energy so we Bought Market Vectors KWT (Solar Fund) at the Market.

I was expecting Solar to trace out a pattern similar to oil, but the Solar is taking it on the chin along with the stock market. With the Stock Market nearing a bottom, let's try to stay with it a little longer.

I still feel long term oil is a good place to be, but shakeouts of weak hands are always needed in Bull markets.

Crude could be in for one more leg of downside action here but after that is complete I see nothing but upward action. Need to hang in there because you can never tell were the exact bottom might be.

Metals???

We are now long both the Silver and Palladium market. We just go with the flow here. Inflation is really heating up.

Update: All metals are going much higher. Stay the course.

Buy GLD (Gold) on corrections.

Well I said buy GLD on stiff corrections. Was that stiff enough. Sure is getting close. Maybe just a little stiffer though. Plus we are already long two metals here so I am not really interested in chasing a third unless I get it at a comfortable price.

The correction in metals appears to be over but I do not expect big moves at this time. Look for all the metals to grind higher.

Key Reversal Week in all of the metals are going to put more downside pressure on them. Be careful of going short to take advantage of it. Those who are not long metals should be averaging long into this leg of the break down. If you wait for exact bottoms you might miss it.

Bonds?

We are now Long TBT as we expect higher interest rates unfolding. This is going to be a tough trade to sit through. The one thing we have going for us is a heavy overhead supply that could contain any rally in bonds. Bonds will be in a stalemate for a couple of months with a downward move coming in the end of May. Bonds are now bumping into the monthly resistance. It was a nice rally in the Bonds but reality will soon sink in. Still it will take a few months to roll over.

Who in his right mind would buy bonds in the face of Inflation and a Falling Dollar? Stay with this one. I still feel that bonds are on the verge of trouble.

This market is going higher than I would expect but I am staying with it. It has me scratching my head but I believe it is about to turn. Remember I said the end of May it should turn. Alright possibly June.

Currencies?

The theme for 2011 will be the rising value of the Chinese Yuan. We bought the Market Vectors Chinese Renminbi (Yuan) Exchange Traded Note that should rise in value with the Yuan. I strongly believe the Yuan will be the place to be this year as the Chinese will need to export their inflation over to the US. I still believe this to be the best trade on the board. The US dollar is failing badly. The Euro with their share of problems will soon follow. Look for the world to turn to something else. Metals and the Yuan. Still at this time we are putting in a stop.

Commodities?

Bought DBA (Agriculture Commodities) at the Market. We are expecting a big push to the upside in Soybeans. We are now long DBA. I have to believe Corn and Soybeans are going higher. We had a stop in place and unfortunately we got ding after we let a profit slip away. Grain prices are going lower but I would not be surprised to see them shoot back up after July Options are over.

Current Short Portfolio:
None

Recently Closed Positions

Bought DBA (Agriculture Commodities) at 34
Sold on a Sell stop at 32.2

Thank You

If you want to contact me send me an e-mail bill@stockbarometer.com