Carl, but that is one of the strange things, one of the most important raw materials inventories, crude, seems to be falling into this period. From a technical point of view, long term rates have breached an important barrier and technically could go all the way to 7.5% over the next 18 month. Whether that will happen is a question. So far the equities markets have completely ignored this, but I doubt they'll continue for long. As I mentioned sometime ago, excess liquidity sloshing in the markets is acting as a counter force and winning so far. I expect that liquidity will win for most of next year, except one or two setbacks as I mentioned earlier. I play it by raising cash into the middle of January and then looking at a good point to redeploy it later. I have been at 100% equities since mid October and am still at 90% now, but slowly getting out. I am also playing some fast games with some of the nifty in their own wide channels ( like JNPR, BRCD, BRCM), and am looking for unique opportunities like RMBS (where you and I disagree on the long term prospects). With core holdings, like MRK, I simply write covered calls (just covered on MRK but will probably rewrite in a week or two).
Zeev |
