Friday, March 05, 2010

MONTHLY SPX CHART

*CLICK TO ENLARGE
A few points additional. We are at VIX inflection point at same time we are near again SPX RESISTANCE of 1150, IMHO one of these are going to give way.
A break down in the VIX below the line I drew could usher in another LEG UP!! 1150 being taken OUT and a test of such would also confirm. RSI staying above 50 also.
Some measures I watch of selling intensity have been "melting away". Trade what you SEE not what you FEEL.
With money markets JUST returning your money with basically NO YIELD, investors are forced to decided what other action they can take to get some yield, maybe one reason so many pile into BOND FUNDS, helping to keep yield artificially LOW.
FED continues to MANIPULATE MARKET buying MBS's and other debt paper right into the face of options expiration.
SO we see a market with some technical strength though getting more selective in its buying, but it continues to be propped up by the not so invisable hand.
US needs about $9 TRILLION (at low end of estimates...will be MUCH higher actually) of debt/deficits to be funded in coming decade...would bring our compiling deficits and short term debt to around $20-$25 TRILLION by 2020.....how is this not going to effect our way of life?
By our very policies that helped induce Consumers to gourge on debt and spend above their means, have helped to ship afar MILLIONS of productive high paying jobs that will NOT BE COMING BACK.
SO, where my friends will the wave of hiring be coming from that isn't government hires.....to propel us into the sustainable revival we so desperately need?
There has never been such a disconnect between the economic activity and the stock market and at some point this will get corrected.
It is true some backdrop of potential exists, fuel for that much needed revival, but policies in place ensure that MOST of the money that NEEDS to get out into economy will only be used to enrich the few, the BANKSTERS and no one is willing to change this.
"CASTLES MADE OF SAND, SLIP INTO THE SEA....EVENTUALLY"
Duratek

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