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From the monthly archives:
August 2011
We’re using an important Hidden Pivot midpoint at 1809.50 as a minimum upside target for the near term. How important? It’s linked to a ‘D’ target at 1893.10, so a two-day close above it would have very bullish implications for the intermediate term. The provenance of both numbers is shown in the accompanying chart. It’s the same pattern as the one reproduced here yesterday, but with a different emphasis and different details.
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We’ve been fixated on a not-terribly-ambitious 1227.25 rally target in the E-Mini S&P for so long that DaBoyz’ weakness is becoming palpable, as though they had been exposed to Kryptonite or something. While it’s pleasant to see the bunko artists in such a weakened state, they have yet to be brought to their knees, let alone be decimated. Patience is called for — and also diligence in looking for small patterns than can get us short.
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A Savvy Advisor Prepares Clients for More Deflation
by Rick Ackerman on August 18, 2011 12:01 am GMT · 26 comments
[With unemployment above 9% and productive capacity heavily underutilized, the U.S. economy is slipping back into official recession. In a letter to clients, our friend and financial advisor Doug Behnfield has predicted that deflation is about to return with a vengeance -- presumably with bullish implications for high-quality bonds and, get this… municipal bonds. For Doug’s take on the stock market, fixed-income securities and a Baby Boomer cohort that is ill-prepared financially for retirement, read on. RA]
Over the last few weeks, stock, bond and commodity markets appear to have played “catch up” to fundamental economic changes that began early in the first quarter. In early February, 30-Year Treasury Bond yields peaked at 4.8% and started down sharply as bond prices rose. The municipal bond market did the same. The S&P 500 hit 1300 and essentially stopped rising, creating a volatile topping process that lasted until late July. Since then, the bottom has been dropping out of both stock prices and bond yields. The Fed has promised to keep very short term interest rates at 0% for at least the next two years.
The economy now appears to have rolled over early in the year. Employment and housing prices peaked in the first quarter and GDP growth was revised down to 0.4%. At year end 2010, Q1 2011 GDP growth was widely expected to exceed 3.5%. State and local governments began aggressively tightening their budgets and it seems clear that the » Read the full article