Thursday was ugly. Friday was better. Yesterday was ugly and today is better. Bottom line? All of the major indexes are lower since Thursday. And, much lower since the April top. Our point is the only way to really play this market right now is to fade the rallies and either get short the index ETF's or buy put options on your favorite index ETF when the market is showing a little strength. Whether that's the QQQ's, the SPY's or the DIA's really doesn't matter because this market, across the board, is moving in tandem on a day-to-day basis. The QQQ's represent the NASDAQ 100, the SPY's represent the S&P 500 and the DIA's track the DOW Jones Industrial Average. If you are going to try and get long the market on a short-term basis, knock yourself out because the way the indexes are trading continues to point lower when it's all said and done. The risk associated with trying to catch a short-term bottom right now is way too high for the potential reward. We've got negative consumer sentiment, worries all over the world about this, that and the other, but I suspect the real reason this market started to sell off in April wasn't because of recent government data or Europe's woes. I'll explain. Just like we said at the beginning of April, this market was perfectly due to pull back from a technical perspective, and sure enough it did. However, I don't believe the fundamental reasons for why this market has continued to move lower have been revealed just yet. I think it's extremely important to remember that fundamentally, stocks trade based on forecasted earnings growth. Prior to 2008, there was extreme jubilation. Everyone was running around flipping houses, buying expensive cars, buying homes they could only afford via creative financing, overly speculating on everything from oil to coffee and walking in to high paying jobs with little experience. It was one big ongoing party. Then, the mortgage crisis hit and everyone started to panic. The economy then revealed that underneath it all, things were definitely not as rosy as they had thought. Why? Because most investors, as well as the average retail consumer usually only care about what the Government is telling us, when in fact, they should really care about what small business and corporate America are telling us. On the heels of the 2008 crash, companies across the country ratcheted down spending, cut costs and basically streamlined their operations to meet and beat Wall Street's expectations for the next three years. The results helped spark a rally in the Spring of '09 that lasted roughly three years. In my opinion, it became quite evident that Corporate America was among the most frivolous of spenders out there because once they were forced to actually focus on productivity and internal efficiencies, they delivered what I consider to be more trusting results. Now that we've gone through this cycle of cost cutting, improved efficiencies and increased productivity, what's left? All that is left for companies to deliver and bank on now is true economic growth. So, with that being said, has the ultimate shoe for the markets yet to drop? Immediately during and after Q1 earnings were reported this year, the markets started to worry. Was that because they started to see signs of companies not able to sustain their recent growth without now having true underlying economic growth? With Q2 earnings on deck following the month end, is all of this a prelude to what's coming? If you think hard enough about what I'm saying, one could make the argument that unless the underlying economic landscape of this country has truly been growing again, companies are not going to be able to meet or beat their numbers because they've already done pretty much everything they can for the last three years. The last shoe to potentially drop may be Corporate America has already done everything they can internally do to continue to provide good results. Now they need more. If all of this has simply been propped up by Bernanke's aggressive monetary policies, then the true bottom in this market will come when all of a sudden Corporate America isn't delivering anymore and the current prices of stocks become overvalued. That likely won't be pretty, but on a positive note will likely be one of the best buying opportunities the market will see for quite some time. Remember this newsletter edition come earnings season. The argument is definitely worth considering and we'd be very interested in hearing what you've got to say. Simply reply to this email with your thoughts. We read every single piece of feedback, good or bad.