It would appear so from the reversals we are beginning to see. Our friend in the analyst community [Jun 2: Stop Me if You've Heard this Before - Coal is Roaring] might have nailed the exact near term top in the (coal) sector with his upgrade, within 24 hours. Now that’s excellent work.

He was on CNBC this morning, you can view the video here, or if you read the blog the past 2 months you have heard it all before – when the stocks were 30-60% lower.

Oh analysts…. such contrarian indicators.

If this pattern plays out as the past 4-5 cycles have – the executioner will come visit the commodity stocks as the market sells off, than we’ll hear the “strong dollar” theories and how the market should rally now that the consumer is paying $3.70 gas instead of $4.05, the second half rebound is even stronger of a case, and its time to buy financials, retailers and homebuilders. Then for a period of 7-10 days, we’ll watch in frustration as financial stocks rocket up 20% for no good reason other than the hedge fund computers deem that as “buys”, and global growth stocks will suffer (and we’ll lag the market). That folly will continue for about a week and a half and then in about 3 weeks we’ll go back to the same old stocks rallying…. the ones that actually have a solid business case behind them instead of “the results from earnings are gosh awful but we were expecting deathly ill awful so buy ‘em up!”

This has been an identical pattern that is to the point it’s getting so predictable I am having a hard time believing it will just play out that simply this time around. But just in case it does I am getting my purchases of the 2 homebuilders and 2 investment banks ready to go to launch in a few days or early next week… because it will be “early cycle recovery story and the bottom is in financials” time. Woo.

p.s. folks have you noticed that late day rally EACH of the past 3 days as the “invisible hand” makes sure we close at or above the 50 day moving average. Don’t want to trigger those technical traders to sell off their stocks. I am sure it’s just coincidence Frankly it’s starting to get so blatant, it’s getting to the point of amusement. Free markets and all…

Long Ultrashort Basic Material, Ultrashort Oil & Gas in fund; long Ultrashort Basic Materials in personal account

Last 5 posts by Trader Mark

• Weekly Mortgage Applications Of Interest Today; Fed Already Loses $5 Billion on Mortgages - June 3rd, 2009
• CBSMarketwatch: Can Sequenom (SQNM) Make it Back into Investors's Good Graces? - June 2nd, 2009
• Jim Rogers Agrees with Marc Faber - May 20th, 2009
• Update on my American Idol Trade - May 13th, 2009
• HAL9000 Friends Did Not Enjoy the Rally; Hedge Fund Performance 4.2% YTD - May 12th, 2009