Not much to say tonight and will point you to a great chart sent to us by our friend Jim Miller. Is it really different this time or are we at the height of a commodity bubble which is about to burst?
In in the midst of all the inflation hysteria, we note potential deflationary forces are starting to resurface — China tightening/hard landing concerns; European Debt Default; ECB tightening; potential U.S fiscal and monetary drag; commodity relative price increases and real wage depression. We seem to be caught in some type of inflation/deflation oscillation, which is causing traders to be whipsawed. Take a look at last week’s deflationary performance in charts below.
We’re not sure where where this is headed but the end game will depend on the policy responses, which are becoming increasingly limited and constrained, in our opinion.
Apple broke its $330 support level at the end of trading on Friday, following Google down, which fell over 8 percent and is now down over 10 percent for the year. Apple reports on Wednesday and will give key direction to the market, in our opinion. We’re not liking what we’re seeing and no mood to take on risk here. (click here if charts are not observable)