Market Still Has Not Given Clear Cut Sell Signal

Tuesday Dec 11, 2013

Even though SPY is ready to cross the 15 day moving average, it has not happened yet. Spy did come close to previous highs. DJI has not come back to recent highs. It may yet do so. IWM went below the 15 day moving average. But we want to be cautious here as DJI & SPY may still go higher. However if SPY goes below the 15 day moving average, it will be a clear SEll signal.

Here are the charts
DJI

SPY

IWM

TZA  is giving a BUY signal on heavy volume.

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GLD

GDX  Gold Miners ETF

NUGT

Gold stocks should be used for short time trading right now. We are not sure whether they made the lows yet.
We like to present here what famous investor Marc Faber has to say about the markets

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Faber:  “This is really a big issue for investors.  As you know, some people belong to the deflationary collapse camp.  In their views the whole debt bubble will implode and it will cause the S&P to collapse to say 400, and bonds to collapse either through default or through high interest rates, and real estate to decline further.

And other people, they think that inflation will accelerate and bring about multiple downgrades in equities, and of course a bear market in bonds.  Now, both could happen, but at different times.  I could imagine a scenario where the economy continues to perform relatively poorly.
“In that scenario the Fed will essentially print money.  In other words, purchase assets.  Those asset purchases may one day spill over into consumer prices.  Don’t forget, if you go to Hong Kong and Singapore, most products are more expensive than in the US.  Why?  Because the real estate in these cities is far more expensive than in the US, and so the retailers charge higher prices -- all of them.
And asset price inflation, in time, spills over into consumer prices.  So far it has spilled over mostly into consumer prices of the super-rich.  But at some point it may spill over into the consumer prices of the middle class and lower class.  And every family around the world knows very well how their health care bills have gone up, how their insurance premiums have gone up, how their transportation costs have gone up, so I can’t understand people who have been talking about deflation for so long.

There is only deflation in the brains of the brainless Fed governors.  Because maybe they don’t shop, maybe they don’t eat, maybe they don’t drive.  I don’t know.”  Marc Faber from www.KingworldNews.com  Blog