This may have material effect

The list of short candidates I added yesterday should be something you are looking at today, and if this article from the WSJ rings true, we may very well see a new leg down in the market.


As you may know, Bernanke is set to speak at 3:45 today. What the permabulls want to hear is some hint that QE3 is possible, after all, when you look at the performance of the market vs. the performance of the financials as I posted a day or two ago, you'll see that the market has way outperformed the financials and in the S&P's case, it usually doesn't stray too far from the financials, it did however during the QE1/2 regime for reasons we should all be aware of by now.


In the WSJ article, noted dove, Charles Evans of the Chicago Federal Reserve said he is, "marking down his growth forecasts for 2011 and 2012, but says he isn’t prepared to call for new Fed actions to support the economy."


The article continues, "The Fed later this month will conclude its $600 billion Treasury securities purchase program. Mr. Evans doesn’t want to add to it, but he also has no inclination to reduce the Fed’s portfolio of mortgage or Treasury securities any time soon, he said."


and... "Mr. Evans was among the Fed’s more outspoken proponents of the Treasury purchase program. His comments suggest that there isn’t a strong base at the Fed right now for more monetary easing. "


Clearly QE has been the sole driver of equity prices, without its artificial market support, the market will have to stand on its own two feet. 


Once again, Financials vs. the S&P

Financials in green, the S&P-500 in white.


You may want to consider easing into some of the short positions provided for your consideration yesterday.