Market Posture

Bearish commentary is everywhere the investor turns, such as Technician Alan Newman: I’m As Bearish As I’ve Ever Been and Charles Biderman is not feeling your dead cat bounce.  John Hussman has a weekly piece which is well reasoned and perennially bearish, and this week’s commentary was excellent in its own right.

Last week esteemed trader Peter Brandt made a bearish call in Why I think the dead-cat bounce in U.S. stocks may be just about over.  But Brandt closed with:  “By the way, a close above 1415 makes me question the bearish interpretation. A close above 1431 would lean me bullish on the charts.”  Markets have not rolled over just yet…

The doom and gloom prophesy’s are popular because, well, the developed world fundamentals are a mess.  We all know the credit bubble imbalances cannot be maintained permanently and looks to end with ginormous debasement.  While not conspiratorial and lunatic sounding, ISA is proud member of the goldbug community and our bullishness shall remain steadfast.

Further, many investors are afraid of Obamacare as it is implemented over the next couple of years, while higher taxes appear in the offing along with more regulations.

But listen to the markets.  We followed Chess as he noted the divergences in the small post Obama re-election stock swoon.

The 2008 financial crisis was decades in the making as markets were not allowed to liquidate.  So we know the next recession ought to be a doozy.  A judgement still needs to occur.  Generational buying opportunities should be coming.  But what if not just yet?  Perhaps the reckoning is still a bit into the future.

Could Germany’s economy be turning the corner (Sober Look)?  While the interest rate lugnut is artificial, the household formation piece is a real driver as housing is quite strong (Mark Perry).  Energy and auto’s are economic tailwinds too.  Last week’s Bill McBride interview was refreshingly realistic and positive.  Maybe the disparaged Chairman’s optimism turns out to be right.  Did the internet revolution end over Thanksgiving weekend?  Even I upgraded to a smartphone!

Latest indicators show China avoiding a hard landing at Sober Look.  A Chinese stabilisation, to say nothing of a re-acceleration, would be especially positive for the commodity complex.

Meanwhile, the term ‘goldbug’ does not mean gold bull.  But here are two goldbugs little short of ragingly bullish:  Turd Fergusson and Toby Connor.

Most interesting are the opportunities operating more independently.  If natural gas fundamentals have turned the corner, both our favorite gasser and coal name would be in outstanding position.

The charts in Marc Faber’s Deflationary Bust or Government Profligacy and Money Printing are outstanding.  Here is the video presentation.

Citi: Here’s What The World’s Most Important Commodities Will Do In 2013 at BIISA will suggest Citi’s natural gas and silver average price predictions could possibly be below the low mark for the entire year.

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