It feels like there are a lot of bearish stocks out there. From europe to emerging markets, there is not the slightest hint of bullishness on the horizon just yet.
Any bullishness in equities will most likely be driven by hope and optimism rather than fundamentals. Sharp Rallies IMHO should be viewed as potential bull traps.
Here are some charts to show you where some of the opportunities are:
PBR has formed a giant Head and Shoulders.
Fundamentally, this stock has more downside when you see head lines like
"Petrobras board OKs massive hike in share issuance"
On the European end, the TED spread is not looking too good either. US equities has all along tolerated the TED spread during the recent melt up....I just wonder what is in store this time?
If we consider only US equities, money is still not coming out of US bonds either. Interest rates will most likely stay low as long as it needs to be... There could still be some upside for TLT, watch out for more selloffs in the equity market.
As for GLD, there is nothing bearish in the chart just yet. The recent decline could be due to selling ahead of European holidays. Just need to see what happens when they come back.
Of course, there is always the "World Cup 2010" from 11 June - 11 July. Will these fund managers take a long vacation? Just hope they are not only keeping their eye on the ball! ;)
We must remember that short selling equities may not be the right strategy for the whales/bears to get the best prices in equities....the way I see it...the most effective strategy for them is to move their money into treasuries and assets like gold temporarily.
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