We’ve been keeping a close eye on US Treasuries lately. That’s because the bond markets are full of useful information about the real state of the economy. For one, they tell us how investors really feel about government wastefulness.
According to Crisis Strategy Alert senior analyst, Charles Delvalle, “the big reason the Goldman did so well was because the bid/ask spreads on stock trades were far, far higher than normal.”
Anyone who follows a chart knows that the 200-day moving average can give clear signals whether a stock is in a bull run or a bear run. Since the moving average is for 200-days, it gives you a clearer picture of the fundamentals driving a company.
When people are losing their jobs and pitching tents because they lost their home, they aren’t going to go to Macy’s to buy a new pair of $100. With whatever cash they have (or panhandle) they’re going to go to Wal-Mart (NYSE:WMT) instead.
As long as there’s fear in the marketplace, stocks can’t sustain a rally. Investors simply get too scared of holding onto their positions for long periods of time. They think the market might sharply drop again. But if fear is subsiding, then stocks are able to move higher. Investors begin buying on the dips and there’s a willingness to put more money into the stock market.
A lot of people want to know if what we’re seeing is a sucker’s rally or the real thing. Figuring it out is actually very simple. A true market rally isn’t built on government intervention and positive spin. It’s built on solid economic growth and solid earnings.
What sectors rise when the economy begins to emerge from an economic downturn? The answer may surprise you.
Oil is a hot topic. Even when I was five my mother always moaned about how much gas prices had gone up. Before I got my first car, I was already an expert at locating the cheapest gas stations. So I felt particularly betrayed that oil prices didn’t move down much further like I predicted they would here. But listen, I don’t like losing. So when I realized was wrong, I decided to look at a chart of the Light Crude Oil Contracts ($WTIC) and see what it told me.
Even with China’s veiled threats to pursue a “new reserve currency” and even with Ben Bernanke dropping cash from helicopters, I still don’t think the dollar is heading much lower. Here’s why…
The stock market has rallied over 20%. Everyone thinks that we’re in the midst of the next ‘suckers rally’. I’m even convinced that the market will head up over the next few months. But the Volatility Index (VIX) is still saying ‘buyer beware’.
