Buy and Sell Signals, and Other Market Perspectives Message Board

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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 665.67

-0.9%

Nov 17 4:00 PM EST

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To: GROUND ZERO™ who wrote (40656)	11/20/2012 2:02:35 PM
From: Keith Feral	Read Replies (1) of 218900

We could easily retest 1359 again on the S & P. I'm more a believer in W shaped bottoms than V shaped bottoms. It just makes sense to pull the plug on some profits after yesterday's rally. Dollar continues to hang tough, which is a good thing for the economy but painful for the market. Last thing we need right now is another spike in gasoline prices. That was probably the glummest thing about yesterday's rally, which sent oil and gas prices higher. The global economy doesn't work very well with $110 Brent prices. I'm surprised how resilient oil and gas prices have been over the past month with the market getting smacked for 5%. But, it's starting to come unglued today, which is long overdue. WTI prices should have been down at least $3 to $5 for a 5% correction since the election. But, everyone was betting on gold and oil inflation since the election. Now, the inflation trade is coming off the table, but the bond yields are marching higher today. At some point next year, my guess would be that 10 year yields are trading flat or higher for the first time since 2007. In that respect, the market really hasn't hit bottom yet. However, I don't see anyone making much of a call to buy Treasuries lately, just munis. Those might not turn out so well if yields drift higher next year. Once the FED ends Operation Twist in December, we could see a nice jump in yields regardless of the cliff debate, which should continue to provide support for the dollar and resistance for commodities.

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