Monday Sept 24 2012 7:45 AM CST
Monday has consistently been a down day the last couple of months. Still after options expiration Friday one would have expected a more matched day if we have upside left.
One can scan these headlines to see what I mean that there is no lack of negative news. Once social mood switches in synch with this news, markets will head down with a vengeance.
Our decision to exit all major positions last Tuesday on the opening including gold and silver appears correct so far. Even if we begin a rally this week, as we have said this past week risk increases now as the market moves to an eventual top. If you have not, please read all our articles from 9/15 forward to get an idea of our thinking.
I made a short post on oil yesterday, do NOT put a lot of faith in my Elliott Wave Count! Indeed I consider the weak performance of oil here as a very negative indicator for the overall upside. It did not join or hold up with gold silver copper last week. The negative weekly close for the Shanghai SSEC index surely indicates waning demand for industrial commodities.
Even if oil rallies over the next two weeks it is looking like it will put in at best a lower high or just equal the prior high at 110 but now that is a distant 18-19 dollars away. We may need an escalation in potential conflict to justify such a rally, no I don't want that, just an observation.
Amazing How Things Come Together Department
Ths morning I was answering an e mail from a Canadian reader concerinng the real estate market.
-I noted that REITs were among the worst performers in the 1973-74 meltdown.
-then I noticed a pop up ad on my g mail site from, sure enough, an REIT!
- I am putting together a post on real estate especially looking back to 1973-74.
-I mentioned how much better the Canadian Economy had been managed than the US to another Canadian reader. Well check out Kimberly Strassel's article on page A 21 in today's WSJ,
How Canada Saved Its Bacon.
We noted a similar op ed by George Schulz in the past two weeks. The upshot is that Canada got its Political House in order in the early to mid 1990s. The US still could but the longer we wait the worse it gets. The FED now buys 77% of our debt at near zero rates. Revenue is 18% of GDP while expenditures are 23%. We will not grow or tax our way out of that.
Ms. Strassel noted the 'party atmosphere'Bernanke has created. Readers will recall we paired Ben with that ultimate Party Animal
Spuds McKenzie just a week ago.
Has Kimberly been reading TMP? Here is our lead form the weekend update 9/15/12.
A weak start to a middling market performance last week. I have promised more updates during this shall we say interesting period.