Daily Archives: April 5, 2013

Economic Contraction Anyone? Anyone?

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jobs

‘Jobs’ Headline, courtesy of MarketWatch.com

How about you Beuller? Yes you, who takes seriously the Fed’s ability to engineer financial markets and economies. The charts tell first.

The Semiconductors told us (we who were willing to listen, anyway) a couple months ago about an oncoming economic bump. Then the Canaries stopped singing.

Then we referred back to the big – secular – condition of economic contraction as indicated by the ‘real’ price of gold. Real Price of Gold – Things are ‘This’ Far From Changing.

And that brings us to this morning, and a lame 88,000 jobs in March. So this is good for our Dear (Monetary) Leader. It lends implied support for his systematic and ongoing bailout of the banks. It’s the Banks, Stupid.

All is as it should be here in Wonderland. I wish the bull wiseguys and their ‘organic’ economic recovery the best. Biiwii.com

Pro-active vs. Re-active Monetary Actions

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Japan’s pro-active vs. Europe’s re-active monetary actions produced different market reactions today, as shown below. I wonder which one will work out in the long run?

By the way, I’m wondering if Mario Draghi considers whether the ECB’s actions, in dealing with the Cyprus bailout situation, are, in fact, in line with their ‘accommodative’ moneary policy, which was mentioned in today’s press release – “Against this overall background our monetary policy stance will remain accommodative for as long as needed.” Since he used the words “remain accommodative,” I have no alternative but to assume that he considers that all ECB actions, to date, fall into that category…and that the same ‘accommodative monetary policy’ would be used in other situations with other countries. 

Forewarned is forearmed! 

Source: http://www.indexq.org/

Topping Options

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I was getting some flak yesterday for saying that I thought that the wave up from November had ended and that ES and SPX were now in a topping process. Do I know that for a fact? No. That’s why I said that this was my opinion. It is still my opinion, though as I said yesterday morning, this is generally signaled with the formation of a double-top or H&S and neither of those is clear yet. I’m also looking for confirmation with a break below the rising channel on SPX since the November low.

Should I wait for strong confirmation before giving opinions like the one I gave yesterday? It depends on your timescale. The odds that we see a decent retracement here are good, and traders can play that or just look for the buying opportunity at the low. By the time we see strong confirmation however, much of the action may be over and I may well have started looking for a tradeable low. This is just my opinion, and I’m right a lot of the time, it’s just a technical appraisal of the odds however. I have a crystal ball but I’ve never managed to get anything useful out of it. The forty bucks I paid for it on eBay was wasted I fear. :-)

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