The global markets were up today. In the US, the Dow was up almost 900 points! This is a short term bullish indicator since the Dow closed above 8,400. That had been an area of resistance. So, we may see a continued move up over the next few days. Regardless, I am selling into this short term strength to continue monetizing my gains because I do not feel the worst is over. Remember that there will be selling pressure no matter what from mutual fund redemptions and hedge funds (including the one that was on the wrong side of the Volkswagen trade today). Just like how the weakness in the US economy trickled over to Europe and Asia, I think the ongoing weakness overseas will put downward pressure here in the US because, after all, it is a global economy.
The Case-Shiller Housing Report wasn’t pretty. It showed that housing prices in the major cities (Phoenix, San Francisco, San Diego, Los Angeles, and Las Vegas to name the key cities) continue to nosedive. Only two cities, Cleveland and Boston, saw a month to month increase in average selling price.
Today’s consumer confidence index figures were abysmal. Actually, they were the worst numbers ever in the history of this tracking. The Conference Board, who administers this study, began posting results in 1967 and never has the figure been as low as 38.0. The experts and other market professional were looking for a reading of 52.0! Some takeaways from this analysis include:
- People that believe more jobs available decreased to a reading of 7.4 from 11.9
- People that believe income will increase over the next six months dropped to a reading of 10.8 from 15.1
- People that say jobs are plentiful dropped to a reading of 8.9 from 12.6
- People saying that jobs are hard to get climbed to a reading of 37.2 from 32.2
As I said, we should only be getting a temporary bounce in the stock markets. There is plenty of disruptions both domestically and internationally that need sorting out.
Check out these articles I came across today:
- This article discusses how Europe may be facing a currency crisis meltdown. I think this will definitely be the case.
- I didn’t realize the IMF could actually finance itself through a bond issue in its own name! Essentially, the IMF will be printing paper to bail out foreign nations. This is crazy…it can only be a positive for those holding gold and is a sign that there are many nations facing imminent issues that will continue to put a strain on a global recovery for the near future. Here is the article.
- This article discusses some bullish developments in the silver market.
Enjoy your evening!
Regards,
Moolah
