July 8, 2011

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

Ask and ye shall receive – I’m scrapping the “composite” indicator. I don’t use it anyway.

A horrible jobs report with no silver lining at all. Not even enough for BLS to cherry-pick and spin something in their press release. Equity markets did drop – but they were stronger than I would’ve expected. Credit markets are where the action is though and they are looking worse than equity markets. Risk is coming off, Europe is still deteriorating fast, China and emerging markets are jacking up interest rates hard. How do equity investors think this is going to turn out well – with valuations already rich?

That said – for now, there are still some pockets of strength – and mucho hot money. Any liquidity crunch caused by credit markets still looks to be a ways away – barring the unexpected.

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