Misc Observations On Financial Market

Just some more data points on this crazy markets:

  • Have you heard those radio ads on TreasuryDirect for buying US bonds directly? I listen to business channel on radio when driving to work everyday. Never heard that kind of radio ad before. Maybe US bonds are really unwanted and required special advertising these days from public. And US Fed is not alone. California bonds are also in the ad too.
  • I have never seen Xmas tree decoration this early in the year. The first week of October, Macy is already filled with Xmas merchandise. Unbelievable. Halloween is barely here, and Macy is already selling for Xmas? I’m guessing there will be quite a lot of things on sale this year.
  • Have you got your Wii yet? I tried to buy Wii at several stores, and they always run out of stock right in the morning of the day on sale. I think Nintendo Wii is going to have a really good Christmas. If you stock up on Wii, you can probably make some 10% to 15% reselling them on Ebay during Christmas, I guess.
  • The precious metal markets are truly scaring me. Yeah, my portfolio is at all time high. I’m just nervously waiting for the fall to come, just like night is followed by the day. My wild guess is that HUI goes to 459, and then comes back down to 357, correcting some 20%. It appears that there are so much more money NOT in the PM, missing the biggest rally so far. Most of the best market timers that I’m aware of are missing this rally. There goes the best technical analysis down to the drain. There is a reason that I don’t want to time the market so much. I just know that I’m not that smart. If the smart market timers cannot time it, then how can I time it? My guess is that HUI will become so painfully high for people who miss the rally to suck them all in, and/or correct to a value so grudgingly high that few will take up enough shares.
  • As far as I can tell, the band of day traders from 2000 are back in fashion. These day traders are trading China stocks, plus all the high volatility & high momentum stocks. And many more are leveraging their house, and making a killing in trading. Since not everyone can be rich, eventually I am guessing that it will be resolved. Watch out. Everything is alway happy, even if it’s one minute right before the top of the market.
  • I listened to the financialsense.com radio over the weekend. Robert McHugh is stating out my biggest fear for this great country USA. He believes that bond yields will not be going up next year for the benefits of housing market because Federal Reserve will be monetizing the US debts by printing money to mop up the excess of US treasury bonds. That makes a lot of sense to me, and that’s what I would do to save the housing markets if I’m the Federal Reserve. But that’s just NOT the decaying path that I want to see for this great country. Such actions are simply making everyone to pay for the sins from house flippers. When I commented last year about the real losers when the housing market bursts, few people seem to understand what I wanted to say. I think as time goes on, possibly forward by another 6 or 7 years, it should become all very clear.
  • Crude oil is going crazy too. Looks like $4 per gallon will be here sooner than I think. Inflation will transfer the wealth from middle class to the upper class. The short-sighted Federal Reserve thinks they’re doing the country a service, but higher inflation eventually will make big changes in the political arena globally. Poorer people from inflation won’t be happy. And vote they will. I only pray that we will have smart leaders like Ron Paul, instead of Hilter-like leaders. The history has shown that the mass cannot tell a good leader from a bad one. They will demand changes, whoever that can provide to them.

In any case, it looks like phase two of the gold bull market is here or almost here, thanks to Bernanke to kick-start it by cutting 50 basis point. Sit tight. The roller-coaster is going to get wild, both up and down.

Mr. M-Man
 

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