Friday Outlook: Back to Even on the Week

I was thinking more like: “As you were, soldier!” We’re just flat on the week now in equities which must frustrate a lot of bullish investors. It is entertaining I suppose.

Everyone feels pressure to do something investment-wise and we’re no different. When I stated over the weekend Intuitive Dave thought we would rally while Systematic Dave didn’t see it yet I was both right and wrong. Intuition is a fleeting thing making it unquantifiable.

Our man in Geneva gives us the volume and breadth data.



Then there’s Planet Yahoo below.














I’m pressed for time this afternoon so I’m going to post just a few more charts that have been and continue to be especially meaningful.

So, what is the Canary in the coal mine for markets? I think it’s the ongoing bond bubble, fate of the dollar and ultimate inflation baked in the cake. The sharp rise in bonds and negative yields on short-dated T-Bills indicates real fear and is an investor vote of no confidence. The dollar has risen but seems to be turning over after its large run higher. Gold and commodities are making a move higher.

Let’s look.






Looking at a weekly DeMark Sequential chart of FXY you’ll note the previous “9” in early September did lead to a reaction. What does the current “9” portend? So far we got the reaction and we’ll have to see what happens next.


















I’m sorry but that’s all the time for today since meetings and conferences overwhelmed my schedule. But you should be drawn to the bond bubble for what it is: a reflection of fear and no desire to take risk. I don’t think stocks can run far to the upside until money comes out of this bubble nest.

The on/off auto bailout isn’t impressive either way. We can spend some money now to make politicians feel good and pander to constituents and then put them in Chapter 11 or we just let them go there now. The world won’t end either way and the latter remedy may allow for a better long term solution.

After the close, BAC lowered the boom by laying off 35,000 people due to the Merrill (MER) takeover. So do Lewis and Thain get bonuses? What a travesty if they do!

Tomorrow may deliver plenty of fireworks with quad witching, retail sales, inventories and consumer sentiment.

Have a great weekend.

Disclaimer: The ETF Digest has no positions.

Comments

[David Fry:]

Quad witching? Stupid Dave had the wrong monthly calendar open. The fun is next week. Sorry about that.

2008 Dec 12 07:55 AM

[Crudeman:]

Oy Dave...Triple witching is next week...I want some of that funny herb you're smoking!! Never mind, you'll understand when you get to be my age!!

2008 Dec 12 09:30 AM