At present, the bond market is pricing in deflation, and the currency market is saying inflation. Portions of the commodity market agree, and so did the stock market, that is until last Thursday's spike and reversal. But now we need follow through to the downside to show it's serious.
As I've said previously, in a world running on credit and debt, the best way to get your clues is by watching the bond market. The public watches the stock market, while the big money watch bonds. I'd like to see the S&P decisively below 1132 to show harmony with bonds. Until then we risk another thrust higher.
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