basehitz

Friday Outlook: Commodities, Global Markets

"They believe the Fed and powers that be will do anything and everything to reflate asset prices."

March 2008, after Bear Stearns' fire sale at $2, the bulls said "buy stocks cause the Fed has your back". The S&P recovered to near 1,400 and the bulls were confident.

But unlike then, consumer spending shows caution has prevailed since January ’09 thru today in spite of frequent predictions of recovery and the Fed discouraging savings. Consumers savings went from zero recently to 5% today. The norm was 8-10% until the mid-1980s. A return to this type of responsibility is a good thing long term, but short term it requires adjustment. I think savers should be encouraged not punished with Japan-style interest rates.

So sure the bulls have the tape, but they can't bring the volume. And consumers aren’t buying it (literally), at least thru today.

Thursday Outlook: Commodities, Global Markets

“Making you feel good makes them money and reelects incumbents.”

It also helps pass legislation. A rising market -> rising consumer sentiment -> higher poll numbers -> easier to get support from waffling party members, worried about re-election in 2010. So with 2 priority pieces of legislation (healthcare and Cap & trade) both losing majority support, they pull out all the stops.

Recall also that GS stands to be a big winner if carbon trading becomes law. Similarly, GE stands to win big on various green program aspects. Big surprise networks they own go out each day to promote the market.

David, I was surprised to see you take long positions this week. Your weekly charts show fading volume, the Achilles heel of this rally. I understand you follow a discipline.

Wednesday Outlook: Commodities, Global Markets

Speaking of headlines, here’s some of mine:

7/28/09 Corporate insiders more bearish than at any time in nearly two years
By Mark Hulbert, MarketWatch Jul 28, 2009, 1:48 p.m. EST
www.marketwatch.com/st...

8/4/09 Market Ramps Up on Disappearing Volume
by: Tyler Durden August 04, 2009
seekingalpha.com/artic...

7/15/09 Lowry’s Buying Power Index nudges record 1933 low
Posted by Prieur du Plessis
www.investmentpostcard.../

And for comic relief:

6/30/09 To Dennis Kneale: You're An Idiot
Posted by Karl Denninger Tuesday, June 30. 2009 @ Market Ticker
market-ticker.denninge...

Enough fun. (quoting a great market technician) GS targeted SPX 1050. It SHALL come to pass. Ever wonder if there’s any connection between those predictable “stick saves” and why Bazooka Ben and Pelosi are blocking majority support for auditing the Fed’s balance sheet? Just curious. Until the market is allowed to correct, I’ll stand somewhere besides on the RR tracks while I work on my short list. Hope I don’t miss the turn.