Markets look poised to break out. The S&P 500 is poised to take out the previous high around 930 and the declining 200 day SMA. Commodities are moving higher as well. While the markets and the charts may be telling one story, it is important to keep some perspective on economic fundamentals. The May Economic Summary in Graphs tells a far less optimisitic story...
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No end in sight? Or perhaps it is 'the end' we are actually seeing.
Paul Krugman notes that the 'green shoots' in China may be nothing but a mirage: http://krugman.blogs.nytimes.com/
And the current rally? Well, the liquidity created through the ZIRP and the QE has to go somewhere. And since it is obviously not going to consumption - and hence to support production - it is going into speculation.
Now, money not going into dollar assets like T-bill, are ending up somewhere else...
http://stockcharts.com/h-sc/ui?s=$USD&p=W&st=2001-01-01&id=p13813076304
this has been extremely helpful to me. the market isnt rallying, the dollar is collapsing. maybe thats all the same thing. also explains the move up in commodities...its not about recovery, its about printing.
These steps up are nothing more than a trip up the scaffolding. One last hoorah before the trap door and the rope
Long SRS for me today.
Didn't quite catch the low but in with a nice profit so far.
Higher interest rates are gonna kill real estate and the consumer imo.
The rally ends tomorrow as I have opened positions today and thus a market crash is at hand. I firmly believe we are seeing the "split the difference" bull market of 2009 where we retrace to exactly the mid point from the lows to the highs. This idea allows for some more upside, but we will see.
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