SINL

by Bill Baker, J.D.
Editor and Publisher, SINL

As evidenced by great earnings reports from AAPL, GOOG, GS, and TXN during January, there is reason to believe that business is booming in some sectors of the economy. On the other hand, the same type of dysfuntional politics we have come to expect from Obama and the Democrats is dragging down equity prices. If it's not some airhead like Senator Barbara (the check bouncer) Boxer dribbling about not wanting to re-confirm Bernanke as Fed Chief it's Obama lashing out at the banking industry because he couldn't sell the ridiculous health reform legislation package.

China has started tightening bank lending. This move by the Chinese government will slow growth in China. This move is having a negative effect on share prices in Asia. This negative momentum could flow into U.S. equity markets.

There appears to be an overabundance of the type of uncertainty that usually results in equity markets falling. On a case by case basis, based upon earnings, there are certain stocks (like AAPL and GOOG) that I think have a greater upside that downside potential. However, I would proceed with caution here and position myself with an option strategy with a bias to the downside but not ignoring the opportunity for a market breakout to the upside if some of the dark clouds over the market disappear.