Volume is picking up as markets hit the previously described walls of resistance. Clearly, investors can’t seem to follow-through with positions in most sectors. The result could be trading ranges—and we hate trading ranges since they just chop you up. The relationship of bond and energy prices seems to be changing since for the first time in many days: yesterday bond prices declined while energy prices increased. Simultaneously, gold prices are moving higher.
The latter reflects a belief that the Fed is pumping liquidity into the economy which debases the currency. Should this become a trend it may mean that investors are altering their opinions about future economic prospects toward stagflation. This is not a good omen for bonds, the dollar, and income oriented equities. A portfolio oriented toward high growth equities and natural resources should do well in such an environment. However, that doesn’t explain the poor recent performance of the NASDAQ. Perhaps there are more growth opportunities to be found overseas like India for example:
- ETFs mentioned in this article (clicking on a link pulls up articles for the ETF in question): IFN. Note that there's also another India closed-end fund: IIF
- Other articles from The India Stock Blog (in beta, though the RSS feed is up and running).
- The complete list of funds (and links to articles about them) covered by ETF Investor.
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