Lines are being Drawn in the Sand
If one takes a look at the charts and listens to the financial press on these key markets, the S&P Index, the Dollar, T-Bonds, and Oil you see and hear a picture evolving. The picture is that the guru’s see the S&P Index holding the 1812 low, they see T-Bonds hitting major resistance and going down, they see the dollar as having topped out, and they see Oil as having bottomed.
How to handle this Goal Line Stand:
The effort to right the boat is getting a lot of believers. I think Macro investors need to recognize this coming period as a Macro interlude that has the potential for sizable retracements. The S&P could rally back towards 1990 price level, T-Bond futures could back off to 153-16 level, the Dollar could back off into the 95.50 level, and Oil could bounce to the 39.00 level. Keep in mind that the Macros, down stocks, down oil, up T-Bonds, and up Dollar remain in place, I only make these comments to help you stay in place as this Goal Line stand by the guru’s takes place. Who know how long this interlude will take, maybe 3 days, maybe 3 months, who knows, it may fade as fast as I write this.
We haven’t talked about Gold much in the past year as it has limited application in a deflationary environment. I could see a little more rally, maybe to the 1150 level, before taking out the 12 month lows later in the year.