June 10, 2011

Been a while since I’ve posted updates. Haven’t seen the point since the technicals underneath the market haven’t changed direction. However, it is time to update since a reversal may be indicated.

Short-term: 3 yellow, 1 red
Intermediate-term: 4 red

Intermediate indicators are now firmly negative. They probably have been for a couple of weeks but I don’t have a way of checking what they were before I recalculated numbers over the weekend. At any rate, HUGE cautionary red flags are all over the market now. And in particular, cyclical commodities look really ugly and not at all fundamentally underpriced now.

Further, the short-term indicators do not indicate that the market is oversold yet. So there is little reason to expect a technical bounce here. Perhaps some go-nowhere sloppiness for a short while but the signal is essentially not solid enough to even support that case.

The core driver of all markets overall remains — currency trades, Fed and other central bank liquidity pumped in to continue with the corrupt bailout of bank balance sheets worldwide, and periodic concerns about sovereign debt that seem to switch back and forth between Europe, US and Japan.


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