This is nothing but a relief rally in a secular bear market and we’ll be in a secular bear market for another 10 to 15 years, said David Hefty, principal of Cornerstone Wealth Management.
“Right now, being bearish is nothing more than being realistic with what’s going on around us,” Hefty told CNBC. “We still have demand in this country coming down—it’s not going up, and it hasn’t stabilized.”
Hefty said he is most concerned about the following issues still facing the economy:
1. Next February—Mortgage “Armageddon” starts: “This is a middle and upper-class problem. These people want to spend—they make up 70 percent of our consumer-driven economy—but they’re not going to be able to.”
2. California: “If it goes bankrupt, it’s going to make Lehman’s bankruptcy look like child's play.”
3. Obama Administration policies: “If the health care bill, cap and trade and these kinds of policies actually pass, and penalize anyone in this country that actually knows how to make money and create jobs, it’s not only going to push unemployment in double digits, it’s going to keep unemployment in double digits…This is going to create a very long sideways market.”
Energy—But the run is likely over, said Hefty.
Top Technology Companies: