Market Ground Hog Day

Seems like the market saw it's shadow today and turn and ran. Readers know that I'm a huge fan of Gary Kaltbaum. His show was interesting today--more in a minute.

Because I'm so underexposed on this market, AND due to the stupendous day with the financials (I think that I can call that a relief rally), I figured that I would step in with some exposure. I bought some EPP. It was up this a.m., reflecting the rebound in the Asian markets overnight. And then it dripped down along with everything else. The smartest thing I did was buy some EEV as a hedge. By the end of the day, I had scaled out of my EPP and kept my EEV.

I've stated here that I thought that commodities should top for the following reasons:

• fundamentals are declining (recessionary pressures picking up) , though the emerging markets are 'talked' up--I considered it a tired, old story--though I agree that the long-term picture is still that we are in a super cycle.
  
• USD$ may be finding a bottom--but it promptly fell further. My thesis is that with all of this CDO crapola, that European and Asian banks would not have as strong a CB response as the US. Accordingly, the US would be seen as a safer haven due to this strength and market transparency.
• commodities had a large speculative run up--these stocks have been run up like the technology leaders (GOOG, RIMM, GRMN, AAPL).

Both bonds, as MarkM notes in the comments, and commodities (including precious metals) have been considered 'safe havens'--the proverbial flight to quality. But at some point in time the safe haven becomes risky due to the asset prices being driven up.

Now, back to Gary. He believes that gold and commodities have topped. There was severe breakdown in the commodity stocks today. He did not like the action today as you might have guessed. I almost feel like we need another floater or two in the financial arena. Any rally that we have without having those floaters is likely to be skittish.

Gary notes that with commodities falling, there is no market leadership--oh, I guess bonds are leading, but that's not a a good thing, I don't think.