Treading Water Today

After last week’s down market we are seeing a market without much direction today.  A close under the 1419 level in the S&P this week would be a strong indication of trouble ahead. 

Over the weekend John Mauldin’s outside the box letter had an article by noted economist A. Gary Schilling.  The topic was deflation, most of which follows a line that I believe is developing.  He and I would disagree on T-Bonds as he still feels lower yields will occur when deflation grows.  This is no question the standard view of most economists that look for deflation.  My view is that T-Bond interest rates are an artificial rate promoted by the FED and will not necessarily decline to new lows in a deflationary environment.  If you don’t already subscribe to Mauldin here is the link: 

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