No Hope, No Spin, Only Reality.

For a long time, the market was delusional with hope. Hope that Goldilocks is alive. Hope that somehow, Ben Bernanke and company could salvage the obviously crumbling economic fundamentals. Hope that somehow, the past excesses from housing boom and all the garbage that emanated from it will go quietly.

It was clear from last week's CPI and PPI numbers, and FED's "disappointing" 25 basis point cuts in the fed funds rate and the discount rate, that further rate cuts could and will not alleviate the problems that ails our economy. And, the dangers of permabulls including Kudlow and others who continue to pontificate on the virtues of the US economy while ignoring the problems at hand as a nuisance has lesser influence on covering up the inherent problems of our economy.

The general investment public has now come to realize or are rapidly realizing that we are in fact headed, if not already, for a recession and rising inflation- STAGFLATION.

Today's action is a warning sign that the snap back rally is over and that we are about to embark on another down leg in the stock market.

Either go short or stay in cash please.