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Sunday, June 7, 2009

Market Recap

I REALLY wanted to update my shorts and gold miners today on the blog. The lottery tickets are still a small disaster. However, somehow as a new dad time just evaporates. Hopefully I'll have time Monday night.

Lets recap where the market and the US economy is. First, there really isn't any good news if looking objectively at the US economy. Sure, maybe things are decelerating slightly, but over-all, some pretty bad records are being hit.

Lets take a look at S&P 500, TNX (US 10 year treasury notes), and Gold miners.

First, the SPX is now above the 200 DMA, but the market is at a level that provided resistance back in 2003 and in prior periods marked on the graph in green. Notice that in a bear market once over the 200 DMA it usually doesn't stay there for long periods.
From WebSurfinMurf's Financial Blog

Second, is US Treasury yields are spiking hard. So hard in fact that mortgage rates are moving up so quick that companies break any commitment they have on the table if it isn't past the point of no return. This will put a crimp on real estate sales. This will also force Ben Bernanke to do something to pull the rates down. The only legal means (He may come up with illegal ones) to bring the rates down is to scare people into bonds. That happens when the market pulls back. Interest rates are a REAL problem, since the rates are very close to hitting levels prior to Sept 08 market downfall. This is not something Obama needs as he spends into record deficits, or consumers as ALT-A mortgages reset.
From WebSurfinMurf's Financial Blog

Third is gold miners, the gold miners are pulling back. If you are out of gold miners, but want to get in, watch for GDX to hit "around" 37 to start buying. Miners could go much lower, but so far since Oct 08, the miners have never disappointed with retaining value.
From WebSurfinMurf's Financial Blog

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