Sunday, February 05, 2012


With the advance decline line making new ALL TIME HIGHS, if we are in a new Bear Market, this would have occurred only a few times in history with that detail.

Short term we are at resistance and overbought, so a blow back is on the horizon. But there is no indication YET, it will be a serious decline or end of advance as urge to SELL has slacked and without a pick up there and in VIX, it's still Bull game on.

Advance from 09 lows is now in 3rd year, avg bull cycle time frame, but the usual suspects are not in place for THE TOP. You have to play the odds, nothing is 100%.

With the economy in recovery mode, stock market has doubled off the lows of 2009, the Banking system seems resuscitated, why does the FED continue their 0% rate policy?

With any other game in town shut down, the risk markets have little competition, manipulated engineered markets rarely turn out well.
"Chairman Bernanke was forthcoming yesterday when he stated that loose monetary policy distorts the economy and leads to inflationary pressures. I’ll contend that the world would today be a safer place if “easy money” in fact always led to inflationary pressures. In reality, some of history’s most notorious Bubbles developed in an atypical environment comprising loose monetary policy and well-anchored consumer price inflation. One can look to the seemingly sanguine pricing backdrops in the U.S. during the “Roaring Twenties” and Japan in the eighties as cases in point. In both circumstances, a misdiagnosis of the Credit and financial backdrop was instrumental in policymakers remaining too loose for too long - and unwittingly accommodating precarious Bubble dynamics."


No comments: