EU goes deeper into negative interest rates, money moves to where it’s treated best, and Asia’s up overnight. Europe’s up as I type… and our index futures are off a little bit. Money can’t be made… it can’t even be saved in banks anymore… it must go somewhere else. It’s moving into stocks.
Meanwhile, don’t look now, but oil’s off 2%. Why? Iran’s not joining any freeze agreement. Not until they’re pumping 4 million barrels per day… 700,000 more than they did in January! Oilmageddon is underway. It’s coming folks.
Earnings estimates, the fundamental driver of stock prices, are in decline… signalling a likely U.S. recession. Stock market technicals are being stretched to upside extremes, saying market risk is getting extremely high. And, they have reached the very place where, should they retreat from here, will have confirmed the Bear Market scenario, by having ‘kissed’ its down-trending 200-day moving average. It is a period of market irrationality now; when sanity returns, perhaps very soon… it is going to be very ugly.
This week will provide considerable economic news for investors and traders to feed upon, including a meeting of our own Fed the middle of the week. I’m more than content to just sit aside and let all this play out. The real risk to wealth, right now, is unlike anything seen in a long time!
Here’s to your successful investing!
Harold F Crowell