Despite all the fraud and corruption that embroiled some solar companies connected with the election, solar is still the darling of the president. He's on the same track, even by executive order, as he made clear in the SOTU address. It's no surprise the market saw this one coming and piled in on speculation after the 1st of the year when Congress gave the "all clear". Not bad getting a 7.28% dividend even at these highs as a cushion - not to mention "Greenie" bragging rights. Solar Index (TAN) 6 Month Daily (TAN, USO)
by David Gillie
Another relatively light week of economic data show us a significant decline in the MBA Mortgage index coming in at -6.4% from the previous 3.4%. This not especially alarming in that the real estate sector got overheated and may need a little cooling off period. Retail sales met the expectation of a slight decline. Import and export prices both rose - just another casualty of the Currency War.
None of these particularly newsworthy. Also with all the hype, the State of the Union address had no market moving statements. Higher taxes seasoned with misleading statistics - all standard procedure.
The Currency War is escalated with even smaller countries like Venezuela joining in. Reminds me of the Cold War era. How to we "duck and cover" our money?
I'm going to have to break out my Thesaurus to find more ways to say "flat" in this market.
World War III is being fought with currencies rather than bombs. Printing presses are the new implements of war. And yes, it's the Preemptive Attack, much like the "Bush Doctrine". It began on a Sunday night in the Fall of 2008. Bankers and the US Treasury declared nuclear war with One Trillion Dollars with the war plan written out on a single sheet of paper. This Declaration of War didn't require a single voice from the military. Yet, it's the longest and most expensive war we've even engaged in.
Alright, enough of the hyperbole. What does this really mean to those of us that trade the market? It's simple: the more Dollars printed, the less their value. This means it requires more Dollars to purchase US exports and that is good for the market (inflation).
Back in 2004, then DTN editor-in-chief now editor emeritus Urban Lehner was at the National Farm Machinery show in Louisville and took time out to call me, asking if there was something new or original DTN could promote. Coincidentally, I had just written one of my first On the Market columns about my methodology of analyzing markets, a method that had over the years been winnowed to only six factors that indicate to us the market's opinion of fundamentals and likely direction. These factors include futures trend reflecting noncommercial activity, futures spreads indicating the market's view of fundamentals, seasonality, volatility, and price distribution. Since that day, this method was adapted as DTN's Six Factors and continues to be used effectively despite the changed dynamics grain markets underwent in 2006.
ETFs: DBA & JJG
Investment Grade Corporate Bonds (LQD) has forever been known as "The Old Man's Fund". Apparently, there's some truth in that, as my financially ultra-conservative father had them as his largest single holding in his portfolio (deceased 2005). Corp Bonds were considered ideal investment for quality, income and potential growth. Makes sense. Well, up until the money printers started day trading the markets. Then bond markets started trading like the sexiest commodity in the game. Notice the massive volume increase that came with the onset of the "New QE Market". Sell spikes were at normal redemption times of March and August... until we get to the 4th Quarter of 2012. Three months of relentless high-volume selling isn't just profit taking. It's an exodus! Price didn't collapse, but it lost a lot of support with all those sellers leaving. Invest Grade Corp Bonds (LQD) v. S&P500 (.SPX) Monthly dual axis
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.