Wednesday, March 24, 2010

Index Data and Observations

Closing values for Wednesday, March 24, 2010:


Trend & Value 50:

1063.80 (down .83%)


China Small Cap ADR 25:

910.81 (down .46%)


Precious Metals Complex:

4522 (down 3.21%)


Commodity ETFs:

2042 (down 1.33%)


BRIC Basic Materials:

1023.72 (up 1.32%)


Penny Banks:

1100.91 (down .30%)


Foreign Blend:

7036 (down 151)


General Liquidity:

1014.22 (down 1.05%)


Über-Indicator:

39.79 (down 3.17)

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Huge gold pump at Forbes today. Yikes.

When stocks, gold, and bonds are all dropping, we call that Deathflation. Deathflation is just the opposite of Reflation. With Reflation, everybody wins. With Deathflation, nobody wins -- not even the house. If that goes on for too long then the casino will shut down. Nobody wants that to happen.

Aside from the Really Bad Day in the T-Bonds market, the markets seem to be following my rough script. Dollar's doing alright, commodities going nowhere, gold going nowhere, well, at least not up. If gold accelerates to the downside, then watch out, the commodities complex will really start to come down hard, along with the non-US equities markets. After that shakeout gets rolling then you'll see the US stock market take its dive. Then Treasurys will start to move sharply higher in price.

That's the basic Deflationary Sequence I have outlined in my head right now. (Notice I said deflationary, and not deathflationary. Whatever happens, I highly doubt we'll see a sustained period of Deathflation.)