Wednesday, October 1, 2008

Folow up to Hard Assets for Hard Times in MarketWatch

I wrote a piece for MarketWatch.com saying that the pendulum was about to swing back to hard assets - commodities - after their plunge this year. Of course, I wrote it last week before all heck broke loose Monday and oil collapsed. Boy, was I expecting to get seriously flamed on the message boards.

But lo and behold, I did not. Most commenters agreed and while I am less sanguine about oil, gold looks to be getting quite perky. And this, while the dollar is rallying.

Inflation is not showing up in the CRB index or bond yields but yet everyone is talking about the coming collapse of the dollar thanks to the bailout bill and all its predecessors. I try to listen only to the charts but something is not quite right here.

Could it be 3-month T-bills paying less than 1% with a spike down near zero? Forget after tax and inflation - what little there is at the moment - return.

How about the VIX spiking up to extremes?

You know, with all the government meddling lately I am not so sure technical analysis as we know it is working properly. TA demands a free market where the ebb and flow of public emotion are manfested in price action. When the debate rages over fixing the problem and letting the market do it - and the former is winning - I get very worried.

2 comments:

Dog said...

You are so right about meddling and "something isn't right here". I have done hours and hours of studying patterns and charts today....I believe Armageddon is around the corner. Something smells and the smell is turning in to stench. Ironic how everyone touts that Buffett is buying in to Goldman Sachs and GE (at 10%???). Folks, when was preferred stock considered equity? Preferred stock is debt... He has become a banker. People think that GS and GE paying 10% is healthy? Please....there is a major cycle coming in to play next week....Monday's 700 point decline may seem small....someone or something is about to be buried...without a funeral. (opinion only, speculation to be sure)...I am not trying to be a doom and gloomer or make a prediction...something just doesn't look right and America is complacent...as our govt. leaders have been for too many years. How about removing Mark to Market...? Yikes

Quick Takes Pro said...

Read Jim Sinclair if you want to wet the bed at night - www.jsmineset.com