Wednesday, September 21, 2011

O'kay, I'm convinced...

I haven't been impressed with the selling volume lately. Until the last 1 1/2 hours today! I think the hope is starting to dissipate from the stock market. The energy markets have been weak for some time. They should be strong if we were to expect economic growth.

Agriculture is getting weak...

Gold and silver are getting weak....
Although they can still do anything!

But the clincher is the bond market. The Fed announced today that they will be buying more longer dated treasury debt, which has the effect of lowering long term interest rates, so it is to be expected that bond prices are high, but if the private holders of bonds expected inflation no amount of Fed buying would keep them up.
And the Fed made that comment today of "significant" risks to growth. A new word added to their report this time.
The above chart is scary in its implications for the economy.
It remains to be seen what the stock market will do in the coming weeks, but I think the time is coming soon when stock market participants will finally come to realize that the economy is not going to improve soon. I don't know why we always expect rapid results. It took us 39 years to dig this hole and we won't get out of it quickly or easily.
So, now the market can rally!!!

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