The Swiss team sticking to their medium term call of another wave down but near term they are calling for a multi week rally here this week. They like risk assets ie the CRB as well AUDUSD and believe a new high is to come for some EM indexes. Medium term they stick to their call for a mid summer 10% correction in indexes. As a side comment they site a bottom in the brokers sector is likely here and now. The implications are for some eurusd strength here. They dont mention the pms specifically but i some speculative entries here on gdx, sil, slv and gld looks fine to me. (I would implement stops on the entries but look to run them for as long as the rally lasts). A good valuable report picking up the major asset classes and index sectors.
Rich
p.s. A general comment on the 2012 market thus far. A narrow push up in stocks with a continuation of the cyclical bear in commodities has made 2012 another challenging year in spite of the headline rise in many equity indexes. Dow +6% & S&P500 + 8%. Money flow is turning positive to equities but its slow stuff. Many professional speculators have generally been left behind by under performing the rise in overall indexes as the majority of stocks miss out on the rally. It has been an index and sector specialist market thus far in 2012. Fx indexs has not been unkind and this has supported my own personal performance this last 4 months or so.
Personally, im only marginally out performing the US indexes. I’m strongly out performing the Euro indexes. Im coming in at +7.5% inc divis, so far. This is far from perfect but given the moves in the miners, commodities, euro indexes and the euro itself it could have been alot worse. There are strong divis to come so should the indexes remain at these levels by the end of 2012 its hard not to predict a double digit gain for 2012. But we wait and see.. we must take whats on offer. I have no expectation therefore.
On the macro front we have all sorts of leading economic indicators in the US pulling up short once again. We are still waiting for some sort of momentum in economic nos to sustain from housing to consumer confidence to loan growth etc. All the nos continue to roll through marginally positive though totally lacking any real convinction. Its a very weak recovery this at present. These growth levels are insufficient to support the continued growth in debt, etc. 2013, assuming obama is re elected, promises a huge raft of tax increases in the US. This would totally destroy any positive private sector indicator positive growth story. Therefore the clock is ticking on the economic nos momentum issue. As Krugman says “now is a perfect time for another bubble”. We can almost gaurantee that another will come soon enough as this is the age of bubble economics.
Burdened by huge public welfare systems bubble booms are the only booms that seem likely here. Bubbles will be created by a combination of fiscal incentives as well as liquidity injections through the private sector banking system or the central banking system. These booms can be very significant so their sustainability or otherwise should matter not to us here. We must, as Soros says, “buy a bubble when we see starting to form”. In the age of endless liquidity they are the new wealth creation mechanism. They are the balance sheet quick fix to endless debt creation.
Unfortunely, of course, bubbles merely pass wealth from savers to insiders and a few nimble speculators. Overall capital will be destroyed in the process as false booms are created through fiscal and monetary means that misallocate capital and labour to areas of the economy that would otherwise be ignored. We must be patient for these coming booms. They will come soon as otherwise debt to gdp levels will get seriously out of step. So seriosly that a total systemic collapse will become a real threat once again. In this intervensionist age we can suppose this collapse is highly unlikely so be ready for plenty of bubbles to come care of governments and central bankers in close co-operation.
Rich
(9 votes, average: 5.00 out of 5)
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