There has to be something said about a market that keeps shrugging off bad news and focusing on the minor good news. The really big news this morning is the expectations that Chrysler is more than likely going to declare bankruptcy. Of course the Fed and the Obama admin is blaming the hedge funds for NOT coming in a buying up a company that has horrible sales. Clearly they are not going to buy up a company if it doesn’t make sense financially for them.

Now, let me tell you all the truth about what is happening with earnings this quarter. Since we had just absolute horrible earnings in the second half of last year, nearly all analyst have lowered their expectations and estimates so much that there companies are now “beating” estimates solely on the fact that the analyst is expecting the worst. Still, if you look at these companies a little deeper you would find that they are still struggling. Besides the GDP FELL 6.1%! That means the economy shrank! Think about it realistically - if we are shrinking then how can we grow?

Following last night’s Obama speech, the expectations have naturally gotten better. Everyone thinks that we will just shrug off all the bad news and keep going higher - won’t happen. Again, logic tells us that creating so much national debt in the past 3 months is not beneficial in the long term. Enough said about this, but remember that I worked on the inside for Wall Street’s big players. This hype is just “hook-line-and-sinker” to get people falling over themselves to buy stocks that are over-priced.

As for the markets today, personal income and spending are down. The futures have pulled back slightly but still signal a higher open. Again, how can the economy expand if consumers has less income and are spending less? Moving on, Oil is up this morning after NEARLY hitting my target range around $45 - which I still feel confident about over the next week or so. Member’s portfolio is still ultra short, but wouldn’t you rather be short a stock that’s had a 700% vertical move in the last month or long at the top of a 32% move up in the market? Don’t you think going long at these levels would be stupid? Of course it would be since the risk/reward is not in your favor.