Sitting on the Sidelines

Right now I find myself extremely eager. I have a strong desire to trade but the markets just seem like their in a very weird position. There are very convincing arguments coming from two opposing views; the first swearing the rally will continue because of liquidity in stimulus and signs of "green shoots", the other stating the markets are overbought and a correction is due very soon. I've always found it easier to clear my head when I remove myself from the situation and do something else, maybe even take a weekend getaway to the beach. So this past weekend I took a trip to the Vineyard to enjoy the beaches and island quality of life. With a clear head I reviewed all the information I've gathered and came to the conclusion that the current markets are no place for my money. I believe that in the short term there will be a correction in the markets.
I am waiting for the right time to enter a short position. I think I will most likely short the financial sector because they have the worst underlying fundamentals. Right now alot of the wallstreet gurus are on leave, but since september and october are traditionally the worst months I believe their return will spur a stiff correction for the financials.

I do believe though that companies directly effected by the stimulus will do excellent in the longer term. The government has a few major changes that they will push no matter what, and the money will flow towards their ideals. The first one is healthcare, Obama has vowed to digitize all health records by 2012, thats as close to a guarantee as you'll ever get.
The second change will have to do with natural gas. The US has an abundance of natural gas and yet we continue to use foreign oil. We could save trillions if you were to use our own resources wisely, which Obama will most likely push.
Third is the fact that the US has always been known as the information and technology giant, and in order to maintain that crucial status we've got to push technology.. and hard! We can't let ourself slip behind in this field, so anything linked to new wave technology will most likely see serious gains in the future as the entire world evolves.
Fourth is the need for Cleantech. Alternative energy, water purification, recycling, etc. All of these fields and more will grow intensly as the world moves into a cleantech era.
Fifth is the oil shortage, its a guaranteed gainer. There is only so much and the price will only grow as the supply diminishes, especially with BRIC economies growing dependence.
Sixth is the Smart grid. Our nation electrical grid is still based in the early 1900's. We need a major overhaul in the way we produce and manage our electricity. And this new smartgrid push is no joke. It has to happen if we as a country are going to grow and evolve.

So those are my potential investment ideas for the longer term, but like I said Im going to sit tight until things make more sense.

Natural Gas Outlook: begin taking profits

I shifted my position on Natural Gas Fund UNG today to begin taking profits. I really hate to change my stance before the winter months because normally thats when price increases would take place. If you bought around the low 12's when I originally posted my buy short order you would be up about 10% now, which isn't a bad gain by any means for under 30 days. The reason I had only suggested to buy for short amount of time is the same reason I'm postponing my buys on all other commodities right now; I believe the "bull market" will come to an end this fall. I've named some of the reasons for a turn around in earlier posts but to reiterate; second wave of real estate/ credit crisis, an overbought market, poor underlying fundamentals, unchanged or growing unemployment, and very low consumer spending. These are many reasons that the huge bull market is a fake. We're not even half way through the real estate disaster that started the whole mess, right now we're in the eye of the storm.
I would reccommend holding your shares long but the supply is so great and there have been so many new discoveries that I think the prices will be held down until a greater use for gas surfaces. It would be a great alternative for fueling our cars. Buy the lows when the markets turn down if anything, Im sure there will be some profits to make from there.

How to Profit from the Natural Gas Rebound

If your a logical thinker, as I like to believe I am. You'd be questioning the current prices of natural gas. Now I dont believe that the price should be any higher given the current surplus we have, Supply and Demand should always rule the market. However, I do think that in the near future the surplus will begin to dwindle, and there may be a lag between having to much natural gas and having to little, thats how things usually work, from one extreme to the other. Right now the Companies involved with the exploration and production have slowed their pace to a fraction of what it was a year ago, in an effort to cut as many costs as possible. Its only a natural reaction to a sharp price drop; I think that any business owner would try to get as lean as possible, maybe shut down some projects that are currently unneccessary, postpone some explorations that were in the mix, etc.
So as the winter months roll around and the world begins to flip on the heat I would guess that the current surplus would begin to diminish, and as the forcast is for a 2010 economic recovery, the demand for gas (and oil) will increase. So when the demand increases and the surplus fades its going to take time for these companies to get back into their normal production modes, thus producing a lag between supply and demand. There are a few ways to play this rebound in Natural Gas prices, and I believe that one of the most profitable buys right now is the United States Natual Gas Fund (UNG:NYSE). The price on this Fund has been beaten down so severly that just a rebound to normative price levels would mean nearly a 200% gain. Another great buy is Chesapeake Energy (CHK:NYSE), here you would be looking at a 100% gain if prices rebound back to their early 2008 levels. Can we expect a full recovery? no one knows for sure, but right now there is a serious offset if supply and demand which is affectin the price, and once these imbalances begin to correct we will see some sort of price gain.

Good Luck and Safe Investing