Sep 21, 2010

Markets continue to have anemic volume with the only trading seemingly done by computers reacting to old news events. In today’s case, “news” that is over one year old. Indexes have broken thru resistance. It has brought in nothing from the sidelines.

Short-term: 2 yellow, 2 red – extremely overbought
Intermediate-term: 3 green, 1 yellow – upward trend expected to continue
Stock targets: 70% swimming, 20% neutral, 11% sinking – extremely unanimous/correlated

More of the same with the indicators. Seemingly no reason to sell now and no reason to buy and the boat just looks plain dangerous with stocks all expected to do well. This is increasingly looking like a pure consequence of inflation – ie money from the Fed’s daily debt monetization is going into the markets to boost asset prices.

Well no thank you. If inflation it is, then I will buy silver, gold, and ag commodities thank you very much. International – esp ex Europe and Japan is still looking OK too.

The reason I’m not updating the indicators daily is precisely because the story really isn’t changing. The reason I’m continuing to update them at all is because I still believe that if the story DOES change, then the indicators will do something to give me a heads up.


2 Responses to Sep 21, 2010

  1. Ed Freeburg says:

    What happened yesterday (21st) about 2:30 that lit a fine under the precious metals markets? GORO sure is looking good!!

  2. jfreebs says:

    The Fed announced that they were concerned that inflation is unhealthily low and below their target. So they are setting the stage for another round of quantitative easing – along with the continued dribs and drabs of existing debt monetization.

    That’s why the dollar tanked and gold shot up.

    Yes GORO is looking very good. It may still have awhile before it starts tracking the price of gold rather than its own rampup. But its on the AMEX now and its next earnings report will be its first commercial-scale production. It’ll be interesting to see its cost structure. It has already announced special dividends for each of its first two months of the quarter. Still my favorite name in that space. It did announce a private placement yesterday – with more dilution than I like – but I suspect they can use the funds well and it does probably mean that some shares will become available short-term without driving up the price.

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