Navarro's Big Economic Picture

As I foreshadowed last week, the retail sales report might well be very revealing. It was. While retail sales were up slightly, the increase was due to higher expenditures on gasoline. In other words, we are not buying more stuff but merely paying more for our oil based products.

More broadly, this is shaping up to be the worst holiday season in years. Consumers are caught in the vice of rising gas prices and falling home equity as home prices sank back to 2005 levels.

I'm sure some talking heads on the tube will be able to tease out of a declining dollar, rising oil prices, and a flagging consumer some bullish buying opportunity. I ain't going to be one of them. Risk reward continues to favor the short side. For the risk-averse, cash is king.

This Week's Big Market Movers

This is a dismal week for economic news. Indeed, there is almost nothing of interest on the macroeconomic calendar. That leaves “Black Friday”, the day after Turkey Day, as the only thing likely to be of interest this week. Let's see if American shoppers storm into the malls in force.

Have a great holiday yourself!

The International Scene - Technical Take

With the exception of Brazil, all of the ETFs tracked in this column are showing significant signs of technical deterioration. In addition, both Mexico and the Standard & Poor's 500 have flipped over fairly dramatically to the short side. This is not a tide that you really want to buck.

“Any trader or investor who ignores the power of macroeconomics over the world’s
financial markets will, sooner or later, lose more than they should—and if they are
trading on margin, perhaps more than they have.”
 -- If It's Raining in Brazil, Buy Starbucks

The Market Edge Market Summary from www.marketedge.com 

CONTACT INFORMATION
Peter Navarro
Irvine, California USA
Email  |  Website

DISCLAIMER: This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling, or holding of any financial instrument whatsoever. Trading and investing involves high levels of risk. The authors express personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The authors may or may not have positions in the financial instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future performance.