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  1. FOMC today / Strong seasonality

    It was another strong day for stocks yesterday as the C and S funds were up 1.1%, and the I-fund, with the help of a dip in the dollar, was up 2.1%.

    The S&P 500 is approaching the 20-day and 50-day moving averages, and the declining resistance line. With the S&P 500 now up three days in a row, can the rally continue? Perhaps. Seasonality is quite strong this week, but rallies tend to fade after 2 or 3 days in a bear market.

  2. The Data Drives the Eventual Turn

    I know that usually what I write is rather bearish and sort of pessimistic. There is a natural tendency to become married to a view of the market, and changing from that view tends to be difficult. In fact, usually at the point someone is most bearish and most convinced that the market is going down is the place where it reverses.

    Knowing this, it is important not to become married to either a bullish or bearish perspective. To me, the key to the switch is incoming data. Let the data ...
  3. Layoff Monday

    This morning there is more news that major corporations are going to lay more people off -- Caterpillar at 20K, Sprint at 8K, and Home Depot at 7K. The calendar flips to another Monday and 15,000 will soon find themselves out of a job.

    For all the hubbub about the stimulus package and the great effect it will have on jump starting the economy (because the economy is like a car, right?), it is noteworthy that 2 of the firms, CAT and HD were likely to be benefactors of a construction ...
  4. Deflationary Logic, Deflationary Evidence

    I have mentioned before that I believe that we are entering into a deflationary environment.

    As credit continues to tighten at lending institutions, eventually a more damaging economic consequence will occur -- a decline in the desirability for consumers to take on debt. This severely curtails the ability to manage (i.e. expand) money supply.

    It is the only potential flaw in the logic of monetary policy. The foundation of our monetary policy is idea that there is ...
  5. In What Way Will This Be Different?

    After Bear Sterns revealed that one of their hedge funds was in trouble and would be forced to close is probably the most significant point we can all relate in which the markets began to show signs of strain. I also remember hearing the experts and analysts, aka the ones who currently do or once did analyze the financial markets for a living, claim that the financials have always led us out of any bear market/recession so watching the banking indexes for signs of strength would be the surefire ...
S&P 500 (C Fund)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)