Home > Uncategorized > 2012/08/15: Quick Post: Courtesy Brief Update: Continued Contentious Inconsistencies

2012/08/15: Quick Post: Courtesy Brief Update: Continued Contentious Inconsistencies

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet again on the specific market comments in this post, because today’s TrendView Brief Update is a pointed discussion of the significant clash of forces in the equities market. As we noted in last Wednesday’s QE is the Opiate of the Perma-Bulls part 1a (part 2 to be provided soon), it has been a “bad news is good news” equities market of late. And Perma-Bulls seem to feel the worse the better, at least insofar as that increases the chances for additional central bank Quantitative Easing.

That would be the ‘rock’ that underpins the market. And yet the ‘hard place’ that both investors and short-term portfolio managers find themselves in is the now almost pervasive weak economic data. Even the stronger than expected UK Employment figures this morning and past couple of days’ US economic data (Retail Sales, Industrial Production, NAHB Housing Market Index) did not seem to help equities much in the face of weak data elsewhere.

And the other key aspect we keep a close eye on also reconfirmed those troubling global economic tendencies last Thursday…

 

…in the form of Organization for Economic Cooperation and Development (OECD) Composite Leading Indicators (CLI) confirming pretty much the whole world rolling over into weaker tendencies. And this month’s indications were particularly telling insofar as they confirmed the shift to weakness noted last month for Japan, and most importantly the US. As the latter is supposed to be the engine which helps buffer weakness in the rest of the world, along with continued Chinese weakness that is just not good.

None of which means the equities will necessarily crumble right away, or the primary government bonds and US dollar will push-up markedly in the near-term. It is more of an intermediate-term backdrop, and timing and risk management will still be paramount in such a psychologically-driven market buffeted by such strong opposing views.

Even so, at the very least some of the inconsistencies we noticed previous between the equities and govvies on one hand (which seem to at least passingly reflect classical ‘counterpoint’), and foreign exchange and metals on the other hand have become continuing contentious dislocations in normal intermarket trend relationships.

[As a final note, the OECD Composite Leading Indicators available through the link above is one of the few English language versions available right now. Sadly the OECD has been having a sustained problem with their website since at least the time of last Thursday’s CLI release. The link that normally defaults to display the English language version has only been able to display the French language version since Thursday morning. Along with our advisory clients and readers, we wish to thank the very nice individual in the Secretary-General’s office who was kind enough to e-mail us the English language version.]

General Market Observations and EXTENDED TREND IMPLICATIONS are briefly revisited in today’s TrendView Brief Update. The rest remains much the same as Monday’s Summary Perspective or Technical Projections (depending on the extent of your interest in the broader range of markets.)

Thanks for your interest.

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