http://finance.yahoo.com/q/bc?t=3m&s=CU&l=on&z=l&q=l&c=&ql=1&c=%5EGSPC
Copper is a proxy for the world economy, since it is widely used in manufacturing and construction. It is often called Dr. Copper because (so they say) copper has a PhD in economics. When the price of copper diverges from markets (in this case the S&P 500) there is cause for concern, but the above chart doesn’t really tell the full story.
The following chart shows that copper began diverging from the S&P 500 in August of 2011 and is now down 50% relative to the S&P 500. One would think the S&P 500 must follow at some point.
http://finance.yahoo.com/q/bc?s=CU&t=2y&l=on&z=l&q=l&c=%5EGSPC
LOOKS
LIKE 1929 (CNBC)
“Investors should
remain on the sidelines and wait for a market correction as a 4-year rebound
comes to an end, Sandy Jadeja, chief market strategist at SignalPro said on
Tuesday. Jadeja said the current market cycle showed "extreme
similarities" with 1929. Full story at...http://www.cnbc.com/id/100567928
Mr. Jadeja also cited copper as one of the indicators.
NOW FOR SOMETHING COMPLETELY DIFFERENT
“Deutsche
Bank Upgrades U.S. Economic Outlook: ‘This Time Is Different’ Says Economist
(The Daily Ticker – Yahoo Finance)Recent positive economic data –higher retail sales, better-than-expected report on industrial production and a five-year low in the four-week moving average for new jobless claims – are indicative of an economy on an upswing. Deutsche Bank recently upgraded its U.S. economic outlook, raising its Q1 GDP estimate to 3% from 1.5% and its full-year growth projection to 3.5% from 3%.” Full story at
http://finance.yahoo.com/blogs/daily-ticker/deutsche-bank-upgrades-u-economic-outlook-time-different-125607742.html
My cmt: You know I love the “This Time Is Different” quote. Reinhart and
Rogoff, authors of the book by the same name, might disagree.
Even if the economy is looking up (and I’m not sure that it warrants the optimistic outlook in the above story) stock
market valuations are stretched so the market is not likely to mirror the
economy. The Shiller PE is at extreme
levels. Even PE’s based on forward
operating earnings are likely far too high.
The record profits posted by S&P 500 firms cannot continue. If you want to delve into Valuation in
detail, read this week’s John Hussman, PhD, Weekly Market Comment for March 18,
2013 at
http://www.hussmanfunds.com/wmc/wmc130318.htm
CYPRUS
To no one’s surprise, the Cyprus parliament voted against the
bank-account-tax. The problem for Cyprus is that
their economy is tiny compared to the mega-banks that have parked there. Now they need to bail out the banks, but the
country can’t fund even a portion of a bailout. Europe: “I’m baaack!”
MARKET RECAP
Tuesday, the S&P 500 finished down 0.2% to 1548 (rounded). VIX was up 8% to 14.39.
Tuesday, the S&P 500 finished down 0.2% to 1548 (rounded). VIX was up 8% to 14.39.
NTSM
Tuesday, the NTSM analysis remained HOLD at the close.
MY INVESTED POSITION
With long-term funds, I remain about 20% invested in stocks as of 5
March, due to my risk tolerance rather than the numerical NTSM analysis. To put it bluntly, I currently have no
tolerance for risk. (If I were strictly
following the NTSM numbers, I'd still be heavily invested in stocks.) My
reasoning may be found at…http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
