This is the life of illusion
Wrapped up in trouble laced with confusion…”
Maybe
Frankie knew something after all. Many talking heads blamed today’s market
action on Greece. I don’t know. It may be just a technical reaction – the
stock market rarely moves in a straight line and we were due for a pullback. A drop to the 1310 area (5%) is due anytime. Just the slight slowdown (of market climb) we’ve
had has pulled our sentiment indicator back to more reasonable numbers.
Ben
Bernanke – THE ECONOMIC OUTLOOK AND THE FEDERAL BUDGET SITUATION
Chairman
Ben S. Bernanke before the Committee on the Budget, U.S. House of
Representatives, Washington, D.C., February 2, 2012.
“...
recently, the pace of growth in business investment has slowed, likely
reflecting concerns about both the domestic outlook and developments in Europe.
However, there are signs that these concerns are abating somewhat...Globally,
economic activity appears to be slowing, restrained in part by spillovers from
fiscal and financial developments in Europe.”
Looking
to the future for the United States Bernanke said, “...even after economic
conditions have returned to normal, the nation will still face a sizable
structural budget gap if current budget policies continue...(and) under current
policies, show the structural budget gap increasing significantly further over
time and the ratio of outstanding federal debt to GDP rising rapidly. This dynamic
is clearly unsustainable.”
"Having
a large and increasing level of government debt relative to national income
runs the risk of serious economic consequences....Even the prospect of
unsustainable deficits has costs, including an increased possibility of a
sudden fiscal crisis.
To
achieve economic and financial stability, U.S. fiscal policy must be placed on
a sustainable path that ensures that debt relative to national income is at
least stable or, preferably, declining over time. Attaining this goal should be
a top priority.”
Full
text at...
Regarding
the speech, a poster at a trader’s discussion board, wrote, “Keynesian
economics...has failed. That is what Ben said today, in so many words,
and the media ignored it. We are in for some pretty rough years ahead.”
My
take: This bear market is far from over and that means 1560 (or there about) is
as high as we can go.
FOR
A GOOD EXPLANATION OF THE FEDERAL BUDGET (youtube)
NTSM
Update
The
Navigate the Stock Market system is still positive at the close Thursday.
NTSM
analysis remains BUY.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 100% long in
the long term portfolio (100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page).
