What Now?

Sorry for my prolonged absence. I had a crazier week than the markets, juggling 3 job offers, a wedding, two kids, and deciding to sell all of my puts except the retail index XLY. I realize I missed a few important events in the meantime like the market rebounding about 1,000 points, Bear Stearns losing 98% of its value only to quintuple from its lows, and the Fed acting like China. Gold has taken a dump, but the alt energy stocks have come back in force.

We are no longer free-market capitalists. On "great" news today, homebuilders shot through the roof (again). Median home prices fell to $195K.....that sucks. Existing home sales trickled up on these low prices. However, new home sales come out later in the week and I notice the NAR didn't get into foreclosures.

BAC may take another $6.5 billion writedown, and that comes from Richard Bove, Cramer's long lost bullish brother who has been recommending financials for the last year. People are crazy if they think this thing is over; we're not even into the Alt-A writedowns or peak of ARM resets.

As far as investment advice, I've gone from hell-bent to cautious in the last week. I'd like to see how commodities play out as I think gold has been unfairly punished but will continue to be.....I think many financials and homebuilders still stink but will ride this wave of optimism....I'm also thinking of going very long MSFT and perhaps GOOG with LEAPS out to 2010. My money market has gone from a safe and liquid 5% to 3.8% and dropping thanks to Mr. Bernanke.

Don't forget about the rally during the last bear market, the one that knocked 80% off the NASDAQ from which it is still 50% lower. We're still 1,500 points below October and beware the jobs report 4/4. Things may be quite a bit worse than you think.

On a positive note, 7 of my elite 8 teams are still alive, despite another choke from my alma mater, Pitt. I guess Bobby Knight picking them to win it all was the death blow. My 1 loser was Duke, and let's face it, we all hate The Chef and Duke.