By Stephen Johnston
Allow me to begin with a generalization. While overly specific predictions about the future are bound to be incorrect perhaps it is possible to make useful predictions about what is NOT LIKELY to happen based on the options that are open to us. Of course the options open to us today reflect and are circumscribed by the decisions we have made in the past, both good and bad - a concept otherwise known as path dependence.
By Stephen Johnston
[[wysiwyg_imageupload:2170:]]By Chris Vermeulen
So far in 2011 the equities market has made some sizable whip saw type moves that even veteran traders have had difficulty being on the right side of the price action. The year started out with equities being very overbought and extended making is virtually impossible for a low risk trader to buy on pullbacks. This was primarily due to the fact that there were no real pullbacks other than for a day or two which was immediately followed by prices continuing to grind higher.
In March, we finally had the pullback everyone was waiting for which we caught 4% of the sell off using an inverse ETF. Then we saw the bottom a few days later and caught a 3% gain from near the lows during a rally higher. So as you can see there have been three trends in the SP500 so far this year and we are about to see another sizable move unfold in the coming week.
[[wysiwyg_imageupload:2161:]]By John Mauldin
Today we once again think about the inflation/deflation debate, turn our eyes to Europe and the very interesting election happening there this Sunday, and speculate a little about what could derail the US economy.
But first, a quick note to Conversations subscribers. We have just posted a new conversation I did with Rich Karlgaard (Forbes publisher) and Andy Kessler. A found it fascinating to talk with two rational optimists who live in Silicon Valley and have watched the scene there for a very long time. I will soon be doing two more Conversations, the first with Neil Howe (The Fourth Turning, and one of the most astute experts on demographics) and the second with Albert Edwards and Dylan Grice of the Global Economics desk at Societe Generale and two of my all-time favorite thinkers.
[[wysiwyg_imageupload:2156:]]By JW Jones
The crap rolls out your mouth again
Haven't changed, your brain is still gelatin
Little whispers circle around your head
Why don't you worry about yourself instead
Who are you? Where ya been? Where ya from?
Gossip burning on the tip of your tongue
You lie so much you believe yourself
Judge not l'est ye be judged yourself.
"Holier Than Thou" - Metallica
By Adam Hamilton
Stock bull markets don't rally higher in a nice linear fashion. Their advance is much more chaotic, flowing and ebbing. Two steps forward are inevitably followed by one step back. Today the US stock markets, despite their recent selloff in early March, still look to be in this correction mode. These ebbings present stock traders with awesome buying opportunities, the best ever seen within ongoing bulls.
[[wysiwyg_imageupload:2150:]]By Axel Merk & Kieran Osborne
We believe that continued U.S. dollar weakness may be a consequence of the diverging monetary approaches central banks are taking around the globe. While many international central banks have been on a tightening path, raising rates (i.e. central banks of: Australia, Brazil, Canada, China, India, Norway, Sweden, to name but a few), the U.S. Federal Reserve (Fed) has been conspicuous in its continued easing monetary policy stance. Indeed, while other central banks have been shrinking the size of their balance sheets, the U.S. Fed's balance sheet continues to expand on the back of ongoing quantitative easing policies.
[[wysiwyg_imageupload:2149:]]By Dock Treece
Often when the world is in turmoil, old rules and long-held 'truths" go out the window. This is precisely what we are seeing today with several established theories on investing, including the broad diversification espoused in 'modern" portfolio theory.
The theory behind diversification as been applied according to a [poor] interpretation that it allows investors to build a portfolio that they can simply leave alone for extended periods of time. In a world where many people stress over finances, this theory allowed investors to feel comfortable with the 'safety" of their assets so they could sleep at night and go about their lives.
By The Bourse Theorist
Correlations Remain Strong
Correlations between different product groups continue to be the main theme across financial markets. Be it oil, equities or bonds, over the past 3 years there has been a tendency for many asset classes to move up and down together. Today we are close to seeing all asset classes move down together. The rush to exit will bring the US Dollar back to its "king" status.
[[wysiwyg_imageupload:2142:]]By The Mogambo Guru
I watch expectantly as the national debt again nears the debt limit, and Zero Hour is just a few weeks away, a term I cleverly used to indicate that available credit will be zero. Maxed out.
I let it go at that, as I am not inebriated enough to get up on my high horse to loudly and rudely note that nobody in the corrupt government (including the Federal Reserve) apparently needs any stinking permission from anybody to do anything anymore, including any number or frauds and corruptions, to keep the government wallowing in the oceans of cash it so desperately, desperately needs to keep, you know, wallowing.