If you are bullish now, but were not bullish last March, you are the
guy or girl in the room saying "who's the mark?" and may be in for a
rude surprise. If you were bullish at the March bottom, perhaps you
have got your stuff together and I am just a cranky contrarian jumping
the gun.
Every instinct I had in November '08 and March '09 told
me that deflationist and bearish were the wrong way to be. The current
situation with the long bond yield rising muddies up the waters today,
so until it is resolved, the commodity and inflation trade must be
considered ongoing… along with perhaps the stock market dragging its
tired ass higher as part of what is now becoming the anti-treasury
trade.
But any bull reading anything decent, reputable or sound
into any of this is just a slave to convention, and believe me, there
are many highly educated people in finance. That could prove to be
their undoing. Talk of risk premiums in bonds and the like is just so
much bromide now because we are off the charts, Treasury is talking
about somehow taking us further off the charts (despite the mini
rebellion in the t-bond) and stock market longs are populated by the
momentum herd, trend followers and increasingly, a weary public.
It
is funny; an early subscriber of NFTRH cancelled last summer as he had
come across some information that the markets were going to crash in
the Fall. It would be lights out so he no longer needed the newsletter.
I should have known right then and there that the rally would extend
longer than I thought likely. It is amazing how easily people fall for
bear fairy stories in the age of inflation policy a go-go, which works
constantly against the deflation/bear market argument.
Well
right now, it is bull fairy stories being constructed by the
troubadours on Wall Street and the massive and self-interested
financial services industry the world over, not to mention the
financial media that touts the agenda 24/7. The risk to the bullish
stance – at least for interim hard correction – remains untenable. Real
contrarians endure and await opportunity, whether it be next week or in the spring (repeat: I only need one or two good trades a year, I only need…)
Meanwhile, the
gold-silver ratio remains subdued but in bullish pretense. Dat be
bearish for everything else my friends, if it turns up. A rising GSR
would signal the draining of the swamp despite the best efforts of
policy on crack.
