The thing that you have to keep in mind is...and I will try to measure my words somewhat...
Wall Street is filled with a bunch of crooks, who are trying to screw everyone else, trip stops, give misinformation via deceptive stories in the media or deceptive price action. This is especially the game of choice when nobody really knows what's going on and the market gets choppy. In fact that's what makes it choppy.
It helps tremendously to have a compass in these troubled days, and for me it is the simple and solemn act of watching the bond market, the currency market, and commodities. It reveals the strength of money and the cost of risk.
Long Bonds are laboring below the 50-day EMA, looking really similar to me to the action I saw in REITS and SBUX, etc. before they starting cratering last week. I don't know why; maybe since European long rates are similar and higher international money is beginning to exit our bond market. That means higher long rates here in the USA...and more bad news for the real estate market.
It's weird to see the stock market doing so well and bonds struggling; in my humble opinion this is a divergence worth watching.
Currencies: The US dollar has been in a bear market since 2000. In the shorter time (last few weeks) the dollar has been bouncing back a bit vs. the Euro and Yen. The fact that the USD is so weak means to me that our Federal Reserve has made a decision to 1. turn on the printing presses, 2. keep interest rates low in order to stimulate a shaky post 9/11 economy. The problem here as I see it is that our economy has gotten "used to the juice" and the US economy will start growing breasts and getting hair in weird places and develop emotional problems...oh, and start feeding on itself via a massive wave of buyouts.
Oil...got a 3% bid yesterday, with some follow through today. Is it enough to pull the crude market out of distribution?...maybe, let's see.
Gold and silver still look not so good. I expect more downward pressure in the nearterm. Another below the 50 day EMA laborer.
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