This chart (courtesy of Mish), shows that contrary to hype, retail has not recovered to anywhere near pre-crash levels, though the consumer culture is still very much alive.
This chart (courtesy of Mish), shows that contrary to hype, retail has not recovered to anywhere near pre-crash levels, though the consumer culture is still very much alive.
any thoughts on the recent rally in the markets? Has your view changed on the world?
I did anticipate this rally in Sept (very low DSI sentiment readings helped greatly), but not quite it’s extent, at least not until January when we entered this smooth period of steady gains. I turned short-term nuetral last week, but am now quite bearish on the intermediate-term.
I believe the most prudent thing to do is to wait for the market to crack hard (5%+), then short the recovery, as most major tops are marked by several small drops and rallies. To be more aggressive, but willing to tolerate a few weeks of losses, it would be fine to short now, as this market will almost cerainly fall well below today’s level within several months. Sentiment is getting quite high (though this can be sustained for weeks), valuation is high, and we are overbought. If bonds fall in the coming weeks, it will be the final nail in the coffin for stocks.
BTW, Hussman does this work much better than I:
http://hussmanfunds.com/wmc/wmc120305.htm
Hi Mike,
Did you see Prechter’s recommendation to get out of bonds, notes, and bills and into cash and/or metals? I was wondering what you thought about bailing from T-bills at this time.
T-bills were supposed to be the last link to break, so I am surprised that Prechter is warning away from them so strongly at this time.
There are no good facilities I know of for cash storage in the United States. Does a hole in the ground still seem like a best bet if you must keep your cash in the USA.
Thanks
Hi Bjorn,
I haven’t read EWI in ages. I find it clouds the brain!
I wouldn’t be so concerned about t-bills or even insured bank deposits. I’d keep some physical paper and metal safe somewhere, but that is prudent in any environment.
Sorry I’ve been so quiet lately. I’ll see if I can bring back the habit of writing publicly.
Best wishes,
Mike
Thanks Mike, I had to laugh at the EWI comment.