So what bubble Bernanke has created or creating to replace the housing bubble? I don't think we will get any prize for guessing that correctly.
Anyway, yesterday’s main picture was quite appropriate!
The unemployment claim numbers were better than anticipated. Then it dawned on the good folks on the St. that if the numbers are not bad, Chairman cannot give free money anymore. Therefore the selling. It was not very severe and it stalled after 1PM eastern, after the Europe markets closed. They are waiting for NFP day tomorrow. Not that Wall St cares whether we have a job or not. They want more free money and if more people have lost their jobs it is probably good for them. Isn’t that sweet!
In the morning the other Italian passed the ball to the European Govts. and refused to offer more free money to bail out the Banks there. We have two elections coming up next week which will possibly upset the apple cart of the Banksters. Was it last summer that we had the same drama about Greece and Europe? Only this time, Spain and Portugal are on lines which are many time bigger than last year’s mess. But so are the money printings by the Central Bankers. Do you think we will follow last year’s script and spice it up with Presidential election in the US of A? In that case, it would be a good idea to review last year’s price chart once in a while.
Talking of price charts, here is one from S&P mid-cap 400. This one has been top performer for years in a row.
I see a double top clearly formed in the chart and price action very similar like last year. I have marked and highlighted the areas. Another 15 points drop would definitely confirm that we have seen the high for some time to come. As of now while the bias is down, the trend is still up. If you are confused, just play it safe.
Both crude and gold lost some weight today. The loss was more in crude. As I have said before, Crude normally goes on sale during summer. I would like to short crude on its next bounce. Another one in my short list would be copper once the bounce is over. From Mid-January copper is moving in a range and it looks more likely that the range will break and the next move will be sharply down. I would not short Nasdaq or other indexes for now because I think there are other better opportunities. I expect TLT to also go up steadily but I am not sure how much it can go higher.
There is one chart I would like to share with you before I hit the send button. It is from Jeffrey Gundlach of Doubleline and he has made a comparison between Apple and Google.
Pretty amazing, huh?
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