Financial Sense Blog

The second half of last week we saw some strong price action in the equities market. The SP500 broke through the 5 and 50 day moving averages closing the week just under key resistance levels. The SP500 futures will find resistance at the June high $1099.25, $1100 which is whole number then at $1103 which is the 200 day moving average. Each of these are clumped together making it really just one solid area which sellers will be waiting to short the market.

Why do I feel like after the past week, I have entered the enchanted forest, as the markets have behave as if they were bi-polar, only to finish the week as if everything is purely delightful the SPX 500 is up 6.98% for the month, corporate earnings at first blush have been looking good

The mainstream news media depict two different directions for the U.S. economy. Is one side closer to the truth than the others? Or could both sides of the story be correct?

A look a what FDR really intended for Social Security and how it differs from what we got and how it would have been better than what we got.

The Summer blahs are surely upon us. As an investor, the "sell in May and go away" has been really good advice this year with the turbulence in the financial markets, a highly schizophrenic Congress, a Federal Reserve that has empty clips for few effective weapons and an Executive Branch of Government that is intent on being all things to all people and two-faced to boot, far more interested in putting "face" on problems rather than fix them.

Last week, the price of gold again broke below its new base at $1,200, and the U.S. stock market was again under strong pressure, due to a confluence of fears, most of which point to a deflationary double-dip. The fears were fanned by disappointment in the just-released early quarterly results, by the latest CPI reports that show inflation continuing to moderate, and by yet another poll revealing faltering consumer confidence.

On June 30th both the Industrials and the Transports closed below their June 7th lows. In doing so, anyone who had not already proclaimed a Dow theory “sell signal” seems to have done so at that time. I stated here in my last post on July 9th as well as in recent audio interviews that I disagreed with anyone who has made such statements in regard to Dow theory. I have since received a number of questions asking me how so many people could be wrong about Dow theory and if my position has changed.

The news rocked the global gold market when an almost obscure line item in the back of a 216 page document released by an equally obscure organization was recently unearthed. Thrust into the unwanted glare of the spotlight, the little publicized Bank of International Settlements (BIS) is discovered to have accepted 349 metric tons of gold in a $14B swap. Why? With whom? For what duration? How long has this been going on? This raises many questions and as usual with all $617T of murky unregulated swaps, we are given zero answers. It is none of our business!

Less than 24-hours after President Obama signed the historic Wall Street Reform bill into law the SEC suspended the rule that makes the rating agencies more accountable for their ratings. According to the Wall Street Journal, as recently as June 30 the rating agencies thought that the provision for increased accountability had been omitted. They were wrong

The Obama administration now says that Russian cheating on a new strategic arms agreement does not matter. America would still have plenty of nuclear weapons, and the Russians would never launch an attack. Let the Russians cheat if they like. There is nothing to gain by cheating. What will the Russians do with such an advantage? Will they attack?