Setting the bull trap

We decided we liked Sedacca when he started a September guest post at Investment Postcards from Cape Town with:

Welcome back, my friends, to the show that never ends.
We’re so glad you could attend.
Come inside! Come inside!
There, behind a glass, is a real blade of grass,
be careful as you pass.
Move along! Move along!

Then his email to IP's Prieur du Plessis:

The “Fed has declared war on prudence and savers and rekindled the ‘Moral Hazard Card'"

which tied in with our theme, "Mom, Ben Bernanke Likes Bankers Better than He Likes You"

Here's today's guest post at IPfCT:

This post is a guest contribution by Bennet Sedacca*, President of Atlantic Advisors Asset Management.

Long time students of the market will tell you that “the crowd is usually wrong at the extremes”. Judging by what I see, hear and read in the media, the current consensus is that stocks bottomed on November 20th-21st, an economic recovery will begin in the second half of 2009, corporate bonds are a buy, stocks are cheap and the stock market is now discounting all the bad news. This is surely a sign that the worst is likely behind us.

Even though I was looking for a low in the S&P 500 around 750 (it bottomed around 740 on November 21st only to close at 800 the same day), I continue to believe that was a low point, but not THE low point for this bear market. We were large buyers of Mortgage Backed Securities during the Wall Street de-leveraging and have been rewarded with handsome gains, although we began to take some profits on Friday where appropriate....MORE