I am net neutral now with my investments, mostly in cash.
The Federal reserve is worried. Read this piece.
As David Rosenberg, chief economist and strategist at Gluskin Sheff, pointed out, she used the word “global” 11 times, which was seven more than her speech to Congress in February, and “uncertainty” 10 times, up from three in the last speech.
“Whenever a central banker is uncertain, rest assured that the only certainty is that he or she does nothing,” Rosenberg said in his daily report for clients. “That was the message from Yellen’s speech. Rate risk is off the table, but the reasons for it — a lack of growth visibility — are why investors did not bid up stocks even more so despite her overt dovish tone.”
“If anything, I would say the global problems have subsided since December,” Euro Pacific’s Schiff said. “The real problem is the U.S. economy. The U.S. economy is weakening,”
Schiff said he thinks the Fed may attempt a rate hike this year, but any efforts at tightening won’t last.
“The economy already is in recession,” he said. “The question is, when is the Fed going to acknowledge it.”
Today will be a a very important day.
The market technical outlook looks bearish, the trend of corporate earnings is starting to slow, global economies are struggling, so the Federal Reserve has let the world know that easy money will continue for a while longer. They call it being dovish.
Today will let us know if the market is still inclined to follow the old adage of “Don’t fight the Fed.”
Today would be a good day to watch the film “The Big Short” instead of risking your dough.
Much to be learned from that film.
With consumer staples and utilities showing out-performance, my caution is further supported.
This bear market bounce off of recent SPY lows combined with strength in defensive sectors has me inclined to the short side.
As always, if I am wrong, I will not stay wrong, I will pivot and get long.
Take a look at the T2108 chart below. We have enjoyed a great bounce, but you need to make a decision.
Is this a time to buy or a time to sell?
180 on the SPY is way below us now, so I am raising cash and building up a hedge in the TZA in case we reverse at these levels.
It was a nice bounce, but we are still in a downtrend and up against resistance, as indicated by the red arrow in the chart below.
Jim always has some good bearish sentiment in case you are feeling too well today.
100% chance of recession, says Jim Rogers.