- Feb 13, 2006
Now that SPY has exceeded its previous high from the crash, we are officially in a new bull market.
The primary issue (risk) bubbling below the surface is:
The real spectre of inflation. It is not a risk for tomorrow. It is a risk that is, if it occurs, still a little way down the road. But it doesn't hurt to prepare for its possible arrival. The question with inflation is whether the Central Banks actually do anything. If they do nothing and/or very little, then Gold/Silver/Property/Stocks will all do well (stocks to a point). If however, the Fed either (a) leans against or (b) allows the long end of the fixed income market free rein, then only stocks will do well (to a point, probably to about 6.5%).
The big macro question is: (a) will inflation take hold, (b) will it (if it does) be controlled, (c) if so how.
Over the w/e I'll be looking at the various charts that will provide us with the early warning and crossover points should this risk eventuate. It still seems most likely that the origin of inflationary pressures, will one again, originate from POO and the issues created by the Arabs in their price war earlier in the year.