It's beginning to look at lot like Christmas for equity investors......Mr. Market seems to want to go up! Morning call has the S&P up 35 points, and Gold is up $7.90 @ $1,392, Oil up 1.16 @ $88.95, the Euro is up @ 132.6 and the dollar is down @ 79.95. The bond market sends the 10 year note to 6 month highs at 3.37%, while the long bond trades at 4.45%.
Bloomberg has an interesting index posted this morning. It represents the Soybean, Wheat, Corn, Rice and Palm Oil futures markets, and it is indicating the possibility of major inflation in food prices over the next 2 years.Bloomberg notes that since the 50 day MA moved through the 100 day MA, prices have increased 50%. The 2 times previously this decade when this happened, the prices of foodstuffs increased 2 to 3 times over the next 2 years before peaking. Talk about Cost-Push!
Also over the weekend, that old corporate icon.. The Great Atlantic and Pacific Tea Co, better know recently as A&P filed for bankruptcy, blaming leverage and margin pressures. Looks like margins for the grocery people are going to get crushed as costs increase as pricing power remains weak.
Our proprietary Momentum Change indicators generated a Buy signal at the close Wed., 12/1 and the gap open on Thursday did not give us an opportunity to recommend a new long position. We have been waiting for an entry point, but Mr market has not been very accommodating.....so we will watch this week for an opportunity to make a recommendation.
I the meantime, Our Momengum Change Buy signal is still in effect.
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