I almost wanted to use the title “contained” in respect to inflation but then I saw that Bill Fleckenstein had used it in his daily missive and I didn’t want to copy.

Let’s get right to it shall we? I still have to read the full BLS release on employment but the wand wavers were able to produce better statistics causing an almost orgasmic reaction in the early AM. My alerts were firing off the hook as economically sensitive stocks sprung up across the board – employment services, technology, finance all humming.

Interestingly, gold and silver were knocked down. Perhaps people think that inflation should be ‘contained’ now but with copper rising 3.2% TODAY, and Bernanke having a 2% inflation target with no plans to raise rates for 2 years, I have to say good luck Ben. If a small change in employment percentages (apparently over 1M people quit looking for work, causing the “unemployment” number to drop) fire up commodities that much, life’s costs are going to rise very quickly indeed.

And if things work like Bernanke actually wants, and lending demand comes back, all of the electronically fabricated funds sitting in the Fed accounts earning 0.25% for banks is going to get lent out, and then the reported CPI will likely hit 6%.

Missing Out?

Peter Brandt brought up a good point a couple of days ago. He missed a good entry into a Nasdaq index trade and was so wishing he hadn’t missed it. He said that if he, a disciplined, experienced trader had the urge to jump in (because he felt he was missing out) , how does the average stock jock feel when he comes home from work and sees his watch list 10% higher? This missing out trade could push this market up another 10-15% in Brandt’s opinion. It’s definitely something to look out for if you get afraid that the market is going to sucker punch you with losses. There are likely millions of people globally who are afraid of missing the UP move.

Mastercard blasted through resistance but I noticed a few economically sensitive stocks that I was watching get slapped back a bit as they tried to make new highs (not sure who sells at new highs off of a long flat base but maybe it was day traders? If you bought stocks and are holding, and have smart risk management stops, you have likely ridden the ride nicely so far. Keep sharp.

At the time of this writing, I or my clients own the following investments mentioned in this column: Gold

Note: this article is meant to be some helpful thoughts to share and not investment advice specific to you. Please consult your own advisor regarding investment and financial decisions. See our disclosures page

Stock markets are moving up yes, but the R2M (revert to mean) trade of 2012 is beginning to tire out. I think it culminated today in Mastercard making up for its entire recent correction with a blast off response to good numbers.

Now we have many stocks that were dirt cheap already bounced back to price levels of previous support. What happens now? As I mentioned before, I think we need some amazing news from somewhere (as this is a news and outside force driven market) to make things move – a massive central bank stimulus, a new government debt…I mean spending program, or 400k new jobs – something like that.

A few stocks that we own have Read More→

1/30/12

Did you ever wonder what the stock market would look like if there were too much involvement by government in the markets?

Well wonder no more. Here it is. Markets just wait for the next magical spell to come from (of all places) a government official. There are a few things going on right now. First off, we can exclude the first trading day of the new year – as that was basically a snap back day from excessive tax loss selling in December. The market is waiting for governments to do something. Perhaps government figures love the power (well of course they do) but this is silly. Bernanke spoke last week and gold exploded.

If we get even a temporary further resolution out of Europe, those stocks will likely pop higher along with the rest Read More→