This is possibly the most bearish headline ever on Marketwatch this morning. When a trend is in place long enough for news editors to proclaim that trading is easy, the odds of a change are high. Ironically, the markets are a sea of red around the world.
Futures indicate the S&P cash could open somewhere in the 1750s. I'm inclined to be a buyer there to add to a position I put on yesterday and scaled out of EOD.
Yes, 1762.48 was broken, but it was quickly repelled. I'd like to see the 1756 area hold today.
Below 1746.20 would be concerning. It could bring a test of 1700-1715 where there is a rising trend line and the 50dma.
Seeing more and more articles boldly going where few articles dare: they are openly discussing deflation.
Central Banks Risk Asset Bubbles in Battle With Deflation Danger
Deflation threat in Europe may prompt investment rethink
All you need to see is a chart of money velocity from the Fed's own data to see this is the case, and has been the case, for many years. Yet to speak of deflation has been to say you're crazy.
That tide will turn soon. In fact, it seems to already be turning. Looks like a breakout to me.
The monetary facts of deflation are almost indisputable at this point. The psychological causes are a growing financial conservatism by consumers. Central bankers find it difficult if not impossible to regulate psychology when they can barely regulate the economy.
When deflation sets in, investors will have to rethink everything, or else the market will do it for them.
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