Market outlook

Futures are relatively flat this morning, indicating a flat to lower open. World stocks have hit a 10-month high, which has many think that the "worst" is behind us. After reviewing at CNBC poll on Tuesday, nearly 90% of economists surveyed said the recession was over and a Bloomberg surveys shows economists consesus expect real U.S. GDP expanding at an annual rate of 2% for the next 4 quarters. This 'sounds' great but the accuracy and complaceny in the market makes very skeptical. Let's date back to roughly six weeks ago when the S&P was at 880. 90% of the of CNBC 'experts' and Bloomberg 'commentators' said that we were going to break the contains trading range of 870-925 on the downside. Many even believed we were going to retest 700, which I have been saying all along is an absolute joke. Point being is that betting with the 'crowd' most of the time is not profitable. In that case, I push all in on the long side with only a 10% cash position and it brought me back to a stellar year (and even those who missed the bottom could have enjoyed 20-30% YTD returns off that push). Now, times are different and my market forecasts have been off, causing me to have a off month for Aug, down 15%. Currently, i am up 252% YTD and doubt I will be positive for the month fo August. Anotherwards, the S&P will probably defeat me (how sad it is but I am an honest fellow). A side of me believes a 51% ramp in the S&P is a bit too much; however, not many were in at the bottom. With all this said, I still think cash is good because on a forward P/E basis, the S&P seems relatively priced in. The bulls are saying the 2010 operating earnings are very low, which may be true. If that is case S&P 'could' print 1,200 but the fears of economic uncertainity are high with double dip recession fears caused by: 1) high personal/corporate taxes 2) high unemployment 3) higher energy costs 4) national deficits at all time highs. Because of this, I have made trades smaller, so if I have to sell, I will sell for smaller losses compared to a full position. Dips are good to buy, so just keep cash and focus on some quality names. The best investing quote I ever heard is "nothing is more important that the price you pay" and I totally believe that, nothing is more important. What was the point in owning Citigroup at $50 during the past 4 years when now it's worth $4 bucks. On the flip side, look at some of these RF trades this year on the blog. Crox at $1.45 now it's at $6. CENX at $1.50, now it's $10+. TNA at $11 bucks now it's $30+. AXP at $11 bucks not it's high $20's. LVS at $4 bucks now it's $13. OWW at $1.44 now $4.50+. FEED at $2.25 now over $5+. LOGI at $8 now over $16+. JOYG at $18 now over $38+. HIG at $10 now at $19+. FAS went from $2.50 to $12+ before split. The key takeways of this is that the price you pay is key and whenever I sell a stock is goes up another 100% (kidding on the latter point but not really - the mystery continues).