Finally back, after months of neglect from this investor. I have returned to my roots, I guess you could say, and concentrated on the technical analysis. Nicolas Darvas said he always made his most money when he was so far away from Wall Street that he couldn't listen to the "news" and rumors. Funny, I've done much better myself since I stopped watching CNBC and all the other financial television channels and just focused on the charts.
Hard to say where the market goes from here. It's hard to say where the market goes from anywhere, but the signals have been mixed lately. 4 weeks of declines, but on below average volume. Many stocks and indices breaking through their 50 day moving averages, but the 200s are holding up and some stocks still have promising charts. The Nasdaq has held true to the 1937 Dow pattern, unbelievably, so that points to a decline back to the lows sometime in the near future. The question is whether or not we have one more leg up before that happens. I prefer to have positions that will benefit either direction, for the time being. A good time for some type of hedging strategy.
From a fundamental perspective, it obviously still looks bad. The inflation trade will have to kick in at some point, but I have no idea when. Could be weeks, months, or years. The recent news about a surge in demand from China was interesting. Is their increase in consumer spending a benefit to their economy in the long run or will they get overextended like everyone else? My bet is on the former. They can certainly afford to spend money that they actually have. Meanwhile, the U.S. government continues to spend money that it doesn't have or, even worse, money that does not yet even exist.
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