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3 THINGS I THINK I THINK

1)  The “buy the dip” mentality is alive and well. Money managers are still chasing performance.  Every dip is a chance to make up lost ground….

2) Goldman Sachs has a superb event driven trade here with their buy call on the homebuilders.   If the conspiracy theorist in you wants to make some money try this:  Goldman has close ties to the government which means they know someone is going to push a housing tax credit extension thru.   That means the homebuilers run up into the end of the year and perhaps longer.   Can’t beat ’em?  Join ’em.

3)  I was having trouble coming up with real catalysts for a potential sell-off before the end of earnings season.  Reader Jack rectified that issue:

1. disorderly dollar crash
2. unemployment not budging
3. housing rolls over again because the shadow inventory finally surfaces
4. commercial real estate shoe drops
5. further rise in oil due to dollar weakness
6. over optimistic earnings estimates for future quarters and market finally starts caring about the lack of top-line revenue growth
7. credit losses overwhelm banks

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