I have never given any credit to "astrologers" -g- (you need to understand that my brother is a head honcho Astronomer and knowing he laughs at them, I always call him the Astrologer).
I have a hard time believing that Astronomy would have anything to do with the tribulations of the stock market. Then again, proof is in the pudding and if they "get it right" I guess I cannot criticize them... Results count, how you arrive at them, well, that is each individual's business.
Now, what caught my eye in those links, was this comment in the Northern Trust site. (NT is now part of Schwab, btw):
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Bear in mind that although high tech is heavily weighted in terms of media coverage, it accounts for only 8-1/2% of industrial production. Big chunks of that other 91-1/2% of the factory sector may be coming out their slumber. And if history is any guide, that's exactly what real M2 growth is telling us - a sustained recovery in industrial production is imminent. This is shown in Chart 3 below. These data are in terms of year-over-year changes in quarterly data. So a change to an upward trend in this industrial production series would be preceded by month-to-month increases. Could March be the first step in that trend change?
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This means to me that the .bomb bubble has now, (for the most part), being cured and although it has attracted a lot of attention, (given the media), and some companies still have some corrective work, it is NOT the majority of the economy... after all, the "old economy" in the end will save the day.
Remember that the market "sees" (or attempt to predict) events 6 to 9 months ahead. I am not saying we are out of trouble, but what it could be is that the worst has past. Yes, debt levels are high and energy cost will impact manufacturing and individuals... BUT if economic activity is rekindled, then this debts could be serviced and even retired.
Similar comments of doom and gloom were made a few years ago in term of government deficits... and now, they are discussing how much surplus we have.
My point ?
The economy of this country is large, (and potentially powerful), enough to overcome the current problems.
Would lower interest rates and generous monetary policy could lead to inflation ?
Yes, but...
Is that worse than a total collapse of the market, which people now view it as their de facto retirement fund ? (and forget S/S). A long term loss of purchasing power by ANY currency has existed for a long time, provided this is not done in an extreme form, it has been generally accepted. Besides, what other currency could become a challenge to the USD ?
The Euro ? (personally I do not believe in it) --too many cultural differences for it to become stronger than the dollar, the politicians may maintin it alive for a while, but I do not believe it really will be a threat to the USD).
The Yen ? Not until they resolve the ills of their economy.
Gold... ? As you know, I do not believe in it. So...
I believe the Fed will do whatever is necessary to correct the worst evil of the ones out there.
I am not advocating an irresponsible policy, I am just attempting to rationalize why is it that the market has regained strength to the upside. I am beginning to doubt this is a mere bear market rally... (but I reserve to change my opinion -gg-). Today it feels solid, advancing slowly, but surely, indeed in some issues there is a little consolidation, without a free fall feel to the same. (NAS up, DOW backing up a bit, S & P up a bit).
I will now step down from the soap box.
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My ADBE Bull spread (put) is working so far. and my L/T Leap short put on ORCL is regaining lots of lost ground. So, I am not complaining today... being careful & conservative today. |
