I wanted to pass along an insight that I picked up from Nic Lenoir, who posts frequently at Zerohedge. He calls attention to the US Dollar and the longer term chart of price action. His observation is that for the past 3 years, (and perhaps longer... I didn't pull back and look) the Dollar has respected the 60 day SMA as either a support line or a resistance line. It is noted that the Dollar last week tested, and bounced off the 60 day SMA at 79. This action could have implications going forward for the equities markets, and even for the commodities markets. A strong dollar and a falling bond market are likely to have serious impacts on the equities market.
And for a little additional insight into what look to be Structural/Institutional labor problems domestically, here is a paragraph from a Harold Meyerson column in today's Washington post:
Our multinational companies still invest, of course - just not at home. A study by the Business Roundtable and the U.S. Council Foundation found that the share of the profits of U.S.-based multinationals that came from their foreign affiliates had increased from 17 percent in 1977 and 27 percent in 1994 to 48.6 percent in 2006. As the companies' revenue from abroad has increased, their dependence on American consumers has diminished. The equilibrium among production, wages and purchasing power - the equilibrium that Henry Ford famously recognized when he upped his workers' pay to an unheard-of $5 a day in 1913 so they could afford to buy the cars they made, the equilibrium that became the model for 20th-century American capitalism - has been shattered. Making and selling their goods abroad, U.S. multinationals can slash their workforces and reduce their wages at home while retaining their revenue and increasing their profits. And that's exactly what they've done. :
TLT is under pressure today and our Buy recommendation has moved to "sideways". We will watch the close for any sign of a Momentum Change.
Best to Your Trading!
Bill
No comments:
Post a Comment