Getting Ready for Thanksgiving……update at 10:44 AM CST..buying stocks
It appears that I was too optimistic on the Super Committees efforts as reports say nothing is going to happen. So, the can is kicked down the road again and the opening for a new political movement/party for the 2016 election widens some more. People are rightly angry and anger will be the driving force for a new direction. There had to be room for compromise, like moving the retirement age to 67 to get more in line with life expectancy and raising tax rates to levels of 20 years ago on the upper end. These could have been accomplished. This country needs to get back to the commonwealth principles that it had at the beginning.
In the meantime trading and investing continues to diminish. People are sitting on their hands and rightly so. At the 1170 level on the S&P, which we could reach this week, a case for a modest long position could be made to take advantage of the Santa Claus rally into the end of the year. Lets see how the market feels when it gets there.
Our longer term positions remain short gold and long the dollar.
Update: The cash S&P is at 1182, a little above our expected low. As such we are buying stock indexes at a ratio to our short gold. Our goal is to be long stocks versus short gold on a 1:2 ratio. The stock and gold markets have been trading together for some time on the expectation of funny money coming forth (monetization in Europe), but Germany is rightly holding strong. Stocks will now need to break apart and deal with life in the US.