Mid-week Musing

Here is a worthy offering from Ritholtz in two parts, especially for those (hello Shirley) who suspect the end of QE will bring a correction in risk assets. See here and here.

My own speculation on the currency / commodity picture is here. Please note: the editors at SA changed my original title, which now overstates the case a bit, but it isn’t entirely off the mark.

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One thought on “Mid-week Musing

  1. Hello Harry,

    Thanks for this mid-week update.

    I am closely watching the social signals and am seeing BIG money changing sentiment. Two examples as of late are Bill Gross of Pimco and Carl Icahn.

    Bill Gross Puts Puts His Money Where His Mouth Is, And Completely Abandons US Treasuries

    11:39 AM Carl Icahn’s giving back his clients’ money, billions worth, and why? Looking back at the rally and recent political tensions, “I do not wish to be responsible to limited partners through another possible market crisis,” though he says he’s not forecasting a market dislocation.

    Then, I am watching how the hawkish Federal Reserve Governors are acting.

    Fisher Could Dissent if Oil Prices Maintain Upward Trend by Asha Bangalore

    And the President’s nominee is finding resistance.

    11:09 AM With Richard Shelby (the Senate Banking Committee’s ranking Republican) again throwing himself into the path, Peter Diamond’s nomination for Fed governor could be blocked yet again. Diamond, whom Shelby calls an “old-fashioned big government Keynesian,” was the only nominee to fail of the three President Obama supplied last fall.

    Then there is the technical analysis side. For one I am watching the Elliot Wave. I am considering as a possibility that this current selling might be Wave 2 and, when (and if) the market direction turns up, that would be Wave 3. I am seeing this as a possibility of the market running up towards a peak of Wave 5, coinciding with the end of QE2. Then a possible Bear correction may begin.

    And IMO, I believe that as market selling efforts have been very subdued with the implementation of QE2, beginning September 2010’s buying the rumor, the rally is uncommonly strong. The QE2 driver is overpowering in this situation, IMO.

    I am looking for the market to resume its rally once it breaks out of this selling mode, which is resembling a Symmetrical Triangle.

    I even projected possible numbers for the S&P: from 1440 to 1500 as a possible top. Also, I am considering an easing out of QE2 into the end of July, or thereabouts, according to what I read.

    This is merely my own personal view of HOW the market works, based on the fundamentals. Thanks for listening.

    Aloha,
    Shirley

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