Weekend August 2, 2014
Mark Hulbert on three reliable indicators for a 20% drop This is a must read, it was in the Weekend WSJ .
Interest rates are edging up, here it is clear that low rates made cheap money available which found its way into the stock market, end of story. And as you can see things are about to change.
Daily Libor
The party is ending. Janet Yellen thinks she is in charge, she is about to get a real education in how markets work. Higher interest rates mean the for free money is evaporating. The meltdown the last two days is likely a pre cursor of things to come.
HDGE
HDGE is an exchange traded fund which shorts actualy stocks. It is not subject to end of month rollovers, etc. that plague so many ETF short funds. It suspect it is time to buy HDGE for a very very long term hold.
HDGE Weekly
We certainly do not have a crossover to the upside of the MAs. That will be a clear reversal for the first time since 2012. If as Hulbert suggests stocks fall 20%, that would be about 1568 on he S & P. THat looks to be about 19-20 fopr HDGE
I am off to an acaademic conferencer in San "Francisco to present two papers this week. The market came back Friday afternon, no doubt the FED is trying to inject more money already. This would be a good time to take money off the table.
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