Larry's Newsletter: LTCFAB

[metalsguru]

I wrestled with the acronym LTCFAB versus ETIBIID for today’s title. The former stands for “Like Taking Candy from a Baby,” while the latter is an acronym for “Every Time I Buy It, It Drops.”

I’m sure the Fraud Street crowd was using the LTCFAB acronym both Wednesday and Thursday and the public buyers were screaming $#!*…or lamenting “every time I buy it, it drops.” I have written often how the public was leaving equities in droves for weeks, which I believe was 40 consecutive weeks of outflows. Some of the money leaving the stock market surely went into ETFs, like gold and other commodity ETFs, but most of the fleeing capital went into bonds…at the top.

The bond market has been dropping for about 20-weeks now. For 5 months the bond market has been going down when the so-called experts said it was a great buy. Now that it has fallen for so long, it may be a good buy; however, for those who jumped in because of the crowd and the expert’s taunts, it has been horrible. Surely the complaints to be heard were ETIBIID: “every time I buy it, it drops.”

Now that these folks have been burned in bonds they recently went long equities again. For the first week in about forty, retail investors added over $3 billion to equities…last week. Since then the market has fallen. With every single newspaper article, every single so-called expert on television, with every single magazine being mega-bullish the average Joe just could stand it any longer and bought…the top.

The recent drop may not continue and the overall market is still very bullish since the Federal Reserve Bank is directly supporting equities; however, the timing couldn’t be worse. ETIBIID, indeed.

The other side of the trade of course, is Fraud Street…just waiting to slam the retail buyers. There is no lamenting in this group, for its saying is LTCFAB: “like taking candy from a baby.”

Trade well and follow the trend, not the so-called “experts.”

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.

Larry Levin
larrylevin@tradingadvantage.com
Trading Advantage
(888) 755-3846__