SPX...a knockout coming?

Unbelievable end to the past week in the market. Back to back 120+ point days to the downside. And I'm hear to tell you I think this is just the start of a major pullback for the broad market. I think we could be heading for a knockout punch. The technicals don't look good and the current rally has seemingly had little basis (in my opinion). Interesting to see the government put out the deficit report this week noting that it shrunk. Umm...How? Not to over-exercise my first amendment right, but could this be a little embellishment of the truth by an administration that is well not doing so hot? Anyways, I think we could be seeing the tip of the iceberg here. If you took the time to read the link in the previous post, you'd probably agree the world economy has serious, serious issues. It's going to take a unified, world-wide initiative to stave off serious financial breakdowns in many key markets. Currency markets are in total disarray due to the breakdown of the dollar. Real Estate is slowing in a higher interest rate market. Inflation (oil and energy) are getting nastier looking everyday. So with that knowledge where do we go? I think the following are good ideas: long gold (wait for an RSI around 50 or lower, likely lower given the broad market weakness), long oils (same advice as for gold), short the dollar and the broad market with fairly tight stops. The broad markets have been trading in a tight range for several months now. We are at the very bottom of that range. One more big down day and the trend will be over. So the tight stop will protect any downside risk if the market holds the trend.

Thumbs up: Taylor and Liz Whitehurst (great wedding, great people)

Thumbs down: France (are they serious about wanting to extradite Zacarias Moussaoui)