Flat, Flat, Flat

I got stopped out of my last position last week.

The strongest sectors of the market, energy and commodity stocks (POT and the like) cracked hard two weeks ago. I set my stops pretty conservatively, and I took my lumps. Now I really can't find I reason to buy anything at all, except some bear funds on bounces, which haven't really materialized yet.

In short, this market just blows, unless one's is a bear.

On the USD/EUR cross: I still feel (just a feeling) that 160. is an unofficial "ouchy" (i.e. intervention) level. I fear we are in the process of testing that idea today into next week. If 160 is decisively penetrated, there is frankly no telling how high it can go. If I were Trichet or Bernanke, I would move heaven and earth STOPPING THIS FROM HAPPENING.

But frankly I think Bernanke is an academic who is in way, way over his head in his present job, so I would not put any level of incompetence past him. Bring back Paul Volker, who will do what needs to be done!

Treasuries? Why am I sitting in cash rather than treasuries? Because in an inflationary environment bonds are a bad deal. Rates are too low!

What to do when everything is wrong? Nothing. Sit until there is something to buy. End of sermon.