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Does This Look Like A Great Time To Buy?

Posted by Steve Wade on

I am not going to push the bearish case or the bullish case.  Rather, I wish to present the wait case.  Right now is not a great time to be stepping in and buying.  Yes, I know the market has been on a tear, but that euphoria is normally followed by reality at some point.  Case in point, lets look at a chart on the S&P 500.

Take a look at the NASDAQ.  Multiple warning signs show on this index.

The dollar is also well outside the normal timing band for a bounce.  Any sort of pull back from an already stretched stock market should cause a large surge in the dollar, which will also pressure commodities, including agricultural commodities, oil, and precious metals.

There have been several large SOS days over the past week as well.  Combined together, things look very ripe for a pull back in the market at the very least.  Next month should be a better opportunity to get more aggressive with stock purchases.

Look For Familiar Patterns In Stocks and Commodities

Posted by Steve Wade on

The road map for how the dollar is trading was actually created back in 2008.  If you look at the chart I have put below, you can see how similar the patterns are at this point.  I have divided the chart into sections that correspond with the dollar cycles.

Stocks do not necessarily trade opposite of the dollar, bu tthey tend to trend with it.  The chart below shows 2008 S&P in an unmistakable pattern that follows with the 2008 dollar.  Barring any significant news such as Bernanke changing fed policy, I would not bet against something similar playing out.


And commodities should work the same way.  Sorry Dennis, but this corn chart is why fertilizer will come down, and so will MOS.

Mosaic got smoked back in 2008.


QE Post #2

Posted by Steve Wade on

Back on April 24, I posted a compelling chart which graphically showed how various asset classes behaved with Quantitative Easing Programs.  Again today, I wanted to re-visit what has happened since that post.   Things have basically played out as I described.  I would say moving forward that these trends will stay in tact until we hear of further interference by the fed.  Until then, expect further deflation on all asset classes, and further increases in the value of the dollar and debt instruments (treasuries).