Transcendental Market Truths:
The Market:
Yesterday's news confirmed what I'd already said was coming: Bernanke is strongly favoring more money printing, whether it's more QE or more twisting, to hold up the economy. The demand side of the economy has fallen and it can't get up any more than it's already done. Until either new jobs are created, or the consumer goes even further into debt, the economy just isn't going to get any kind of real recovery and will have to make do with an economy being levitated on the back of a flood of money being printed by Bernanke.
It's the ultimate fate of a fiat-money economy. Printed money can paper over the cracks in the foundation, but those cracks eventually grow to become sinkholes.
But, for yesterday, the market did get a bounce, just as expected. There's really not much to expect from window dressing buying from Wednesday and Thursday. Oh, perhaps a little, but not as much as on Monday and Tuesday. So, there may be a sinkhole in stocks on Friday.
I don't trade on a feeling, mine is that the market is likely to see the high of the week on Tuesday and could see a pretty good decline on Friday. In between it could be directionless and volatile. Not a great week for playing the trend as the bulk of the week's gains may be mostly behind it already.
Mining Stocks:
One of the sectors which has been downtrodden, has been the mining stocks. Yes, they are cheap. And, yes, they probably deserve to be cheap. If they can breach the downtrend line in the volume oscillator, they would confirm a new uptrend. However, it's much more likely that they will be turned back and start a new leg to the downside this week.
Bottom Line:
The Market is at least 2/3's (possibly 3/4's) into the secular bear that began in March 2000. Every investment book I've ever read has urged its readers to stay in cash during the secular bear cycle and buy stocks during the secular bull period. Unless one is a professional gambler or has no current profession outside of trading, I'd sit on the sideline and wait for the next bull super cycle. My transcendental crystal ball says this secular bear is far from complete. |
