First, I have to say that with my defensive stance I would be better off trading the economy or total employment than the S&P 500. Why, because the S&P 500 trades off the pain in America. Since 2007 the S&P 500 companies have handled the drop in overall demand by laying off people and building a cash hoard. That has been good for stock prices and bad for the consumer and bad for the government deficit.
Where is the sense of responsibility to the country that companies in Germany show for instance?
Anyway the one area where demand has been strong during this period is the Apple Iphone. A great product that every spoiled kid needs to use for texting when they should be studying. Anyway, overall consumer demand level is dropping for toys, and Apple is your lead indicator. Also demand for fine leather goods to hold the Iphone, ie Coach, seems to have peaked also.
So, what is the bottomline, Big Bull Markets are not built around declining consumer demand.
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