Ho ho ho – what a joke the market is!
As noted by Dave Fry, the volume was heavy but the big volume came on the red bars into the close, that dropped the S&P from it's low-volume 1% move up to finish the day back to just over flat – as if none of it ever happened. On even thinner volume, the Futures have already pumped us back to Friday's highs.
Even for the week, all we did was pump back to 2,070, still off the 2,075 high we first hit near the end of November and now December is ending and we're struggling to hold that all-time high zone, so we can close out the year with a nice win for the Fund Managers to print up in their 2015 brochures – to show you how clever they were in 2014.
Now we're into the very thin holiday trading period and you certainly can't trust anything you see on a chart this time of year so the best thing to do it not play.
It's Christmas, for God's sake – go spend time with your family, visit friends, enjoy the season – the market will still be here when you get back!
Me, I've got all my shopping done and the gifts are wrapped so I'm nice and relaxed and ready for whatever. We had fun this weekend posting our "Secret Santa's Inflation Hedges for 2015" just in case the OVERWHELMING sentiment that inflation is dead turns out to be as wrong as it has been for the previous 30 years.
There sure was inflation when I went to Saks Fifth Avenue (HBC.TO since last year) and browsed rack after rack of $1,000 shoes (and that was the sale price!). We actually just went there to show the kids the Christmas windows and the fantastic store decorations but we did end up having $7.50 hot chocolates which were actually the best hot chocolates we've ever had (they had "mix ins" like crushed candy canes and ginger crystals). Still, if $1,000 shoes and $7.50 hot chocolates aren't inflation – I don't know what is.
NYC was a zoo and so was our local mall (Willowbrook, NJ) on Sunday but it seemed to me that not too many people had bags and most were just out to have fun and eat. We'll see how the retail sales numbers pan out – we get Personal Spending for November tomorrow along with Durable Goods and the 3rd revision of Q3's GDP (last at 3.9% with 4.2% expected).
As you can see from the chart, Personal Spending (and Income) has been weak all year – all decade, in fact and, in fact, all Century – so far. In fact, when you take inflation into account, US Households are down about 10% for the century though, since 1965, we've actually gained $1,200 – over 2% – yay workers!!!
It's OK though because those are American workers that are being screwed and US sales are less than 50% of the S&P 500 and represent essentially none of their growth over the past 10 years. It's all about overseas sales now but that's also a concern for Q4 reporting as the strong Dollar is likely to put a damper on those numbers.
That's why we're maintaining our "Cashy and Cautious" stance into the holidays and we are well-hedged in our Member Portfolios, looking to lock in our spectacular gains for the year right where we are now.
One area of concern is the very rapid collapse of the Baltic Dry Index post-Thanksgiving, which seems to indicate a less than robust economy. The Baltic Dry Index provides an assessment of the price of moving the major raw materials by sea and is a pretty good indicator of the health of International Trade and it's down 40% in a month!
Still, no one is worried about silly things like whether or not goods and services are actually being sold when our friendly Central Banksters are continuing to pump Trillions of Dollars, Euros, Yen and Yuan into the Global economy. After all, if you have a severed artery that is bleeding out but the doctors stand around and dump buckets of blood on you, you'll be fine – right?
Sorry, that wasn't a very Christmassy kind of thought, was it? Well, ho ho ho – don't worry about a thing – just enjoy your holidays and stay well-hedged and we'll deal with reality in January or, maybe, with the help of the Fed – NEVER!!!
