Haim, i have been pointing out the H&S in the crb for months. It looks to me that the disinflation/deflationery cycle bottomed in 1998, with a washout depression era lows in many commodities. The fed has successfully avoided the deflationery problem by pumping up the money supply everytime the market goes over the edge (1987, 1998) and now we will deal with the inflationery cycle.
The rally in the bonds from 1/14 looks like a countertrend rally. if the bonds break to new lows, we could be breaking the last two decades of goldilocks, low inflation, low rates scenario, this is why the market is so volitile, we are in a period of change and instability and stretched above historic means, both in charts and fundamentsls -imho.
from a fundamental standpoint this is easy to understand, everybody and their brother is driving a gas guzzling SUV bought under goldilocks conditions, just the same dynamic that we had in the 70's, when everybody starting trading in the gas guzzlers for fuel efficient vehicles (late 70's).
yes this is a new era in information technology, but information technology is a part of the economy, not the whole economy as advertised -g-
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