....the more they remain the same. The FED announced Tuesday they had a NEW "TWIST" to energize the economy....you sitting down? SELL short dated treasuries, BUY long dated ones!! YEAH! that's it's it. Lower long term rates from next to nothing to nothing. 10 year yields are already below 1.9% !!!
Record low mortgage rates haven't hurt the housing market, but how much more could already historic low rates improve the situation? I think you got your answer from the last few days market reaction. The Fed meeting and announcement preceded back to back 90% down volume days, the 2nd one increasing volume from heavy to blowout rising by some 44%....a strong opinion was registered by Mr Market.
Friday appeared to be a "turnaround" day with prices falling early, and we keep hearing about these smart guys running in to BUY THE BARGAINS....NO....the market short term oversold will get a pathetic bounce of pity before it heads lower once again.
One of the main differences is that we are seeing tell tale signs of DISTRIBUTION this time around, not signs of ACCUMULATION. SO I can safely say, there is pretty good chance the Aug lows break down, maybe next week. It's going to get even uglier in a hurry, IMHO.
HIGH unemployment (record actually for a supposed recovery) and business taxation uncertainty, does set stage for a sustainable recovery. What you get is lame congress, lame President and more of the same from those idiots and the FED, a real cast of ignorant characters that JUST DON'T GET IT!
If businesses see a climate of LOWER TAXATION, LOWER COST OF EMPLOYMENT and HEALTH CARE too.....they will act accordingly and expand...look ahead. Right now, what they see is chance of higher taxes and a government that keeps growing and running huge deficits with no real plan to change.
2 years of unemployment benefits have not been enough for a large group of unemployed, weeks to find a job is at an all time high....over 2 years into recovery...for many it has not felt like recovery.
Consumer Sentiment polls near the lows of crisis, never rose to even the worst it was after 911 !! very telling.
Gold and silver, oil all seemed to have popped, even if temporarily. The US $ has popped, but popped higher...we look that much better than Europe?
DO you ever wonder why Oil at near $140 got us $4 gas......and $80 OIL gets us near $4 gas?
What has helped me slightly, is that I am SO engrossed in running and growing my new business that I started, after 30 years involved in family business, that I don't have time to worry about economy and I am smart enough to NOT be exposed to stocks at this time. YES I AM 100% cash whoopie.
There ARE times not to sit around and take a 40% draw down lump!!! IF you can see it coming, IF you don't think the sky is falling and DO come back and buy low. you can't buy LOW if you sit like a squirrel with a nut and don't react....most will not.
It's taken me 20 years of study and PROOF to myself in how I avoided the bear markets that began in 2000....to understand its time in the market that counts...EXCEPT when you should be out or super defensive...like now IMHO
Hey, it's not for everyone, maybe sitting around for the 50% haircut is worth it for those who don't want to miss the rise. BUT, since 2000 LTBH strategy has returned 0%, losses even. You must be fluid, move to the hot sectors, like gold and commodities last 10 years. I don't know if thatrun is OVER, not with the growing new world populations CHina and India, BUT it appears to be taking a big pause and nasty correction has begun. I honestly don't know if this is the pause that refreshes between 2nd and final BLOWOFF stage for that sector.
The law of SUPPLY and DEMAND don't seem to favor sticking in toes just yet....if we watch closely, we won't have to guess when to hard.
Duratek
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