Saturday, August 3, 2013

Broken Record

This week I am going to stay macro, and insert a number of charts I read that gives credence to my thesis that we have;

  • Topped in the broad indexes
  • Bottomed in bonds (interest rates to fall)
  • Bottomed in gold
  • Bottomed in miners
  • Energy is a wild card, but probably a chance for a blowout
Citi put out a great report on the data points that lead the equity markets.  I copy and pasted a couple of their charts to visualize the point I have been making.  I also copy and pasted charts from Calibrated Confidence to show that investors are tapped out.

To set  the stage, my view is the lemon has been squeezed.  Volatility has been rung out,  investors are all in, smart money is leaving as retail money is moving in, housing has been squeezed, car sales have been squeezed, and margins have been squeezed.

It got us marginal new highs in equities, but now revenue sequentially is moving lower, energy costs are moving higher, interest rates are moving higher, the dollar is eliminating free FX profits, the consumer is tapped, employment has peaked, and the government is stalemated.  energy, jobs, and finance charges are all that matter to people, and that will drop consumer confidence, which sets the dominoes in motion.

Fascinating charts below.  You can read my previous weeks posts to understand my linkages between gold, energy, bonds, etc.

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