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Flat On My Butt . . . Not :) April 11, 2011

Posted by Tom in Thoughts.

My posts here over the last 2 weeks have been few and shallow, as I’ve been “on the road” going to class and a convention.  These opportunities have been very helpful and I hope very productive in the future.  But, before one modifies a strategy, one must test and evaluate it.  And that’s my next objective(s) (I have quite a number of things to do here).

So . . . I really have not been “flat on my butt”, but actually working.  Enough of that, let’s talk markets !

What concerns me here is the market action.  By that I mean a gap up / higher open, then a steady fall back.  Now not every day has done this, but there have been quite a few lately.  This coupled with low volume shows me that the market has no follow thru and little interest in buying (or selling for that matter).  What is “in play” are inflation based commodities.  Grains, oil, cotton, coffee and of course precious metals.

Perhaps the stock market is waiting for 1st Qtr. earnings so it can react.  AA (Alcoa) starts the season by reporting today, Monday, 4-11-11.  Aluminum producers have been hit with high energy costs, and metals are a sign of industrial demand so this could be interesting.  With obvious concerns about inflation, bonds are an area to watch closely.  Interest rates are at near all time lows; as rates go up, bond values fall.  I’m afraid that few retail investor understand this.  They think of bonds as being a “safe investment”.  I’ve heard that bond mutual funds are seeing a net inflow of funds while stock funds are seeing outflows.  To me, it looks like a classical case of the little guy being wrong again.  Another area to watch are Emerging Markets (Brazil, India, China and Asia in general).  They have been picking up lately but they are “held captive” to the health of the consumer nations of the West.  Our health is their health.

Stay alert, and be careful out there.  Have a good week.  Now, back to work!


1. Eldora - April 12, 2011

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2. Emory - April 13, 2011

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