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06152011 – Interim – ALERT June 15, 2011

Posted by easterntiger in economy, financial, markets, stocks.
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Current Positions  (No Changes)

I(Intl) – exit; S(Small Cap) – exit; C(S&P) – exit ; F(bonds) up to 40%;  G(money market) – remainder

Weekly Momentum Indicator (WMI***) – last 4 weeks, thru 6/14

-5.1, -14.28, -24.57,  -24.54

(3wks ago/2wks ago/1 wk ago/this week)

Several indications appear to be failing for any attempt for an upside reversal from this level.  Dow triple-digit gains from yesterday are reversed back to triple-digit losses today.

Many of the worlds markets have trended sideways, with short, interim higher peaks, for over 7 months.

Markets must either rise here, or hold here.  In that absence, risks will move dramatically higher, moving prices much lower.

If buyers fail to step in soon, sellers could step in and do so quickly.

The potential for a rapid decline would exist if that should occur, resulting in near sudden and heavy losses.

Price levels for S&P 500 and 100 indexes are near the same levels where failures and severe, crash-related weaknesses occurred in 2008 – S&P 500 crashed from around 1300 in 2008, now at 1270; S&P 100 crashed from near 600 in 2008, now at 565.

I would remove any exposure that I have to any equity funds, which in our case would mean closing any remaining positions in I(int’l) , S(small cap) or C(S&P) funds immediately.

Gold, silver, oil, etc. are all showing signs that recent appearances of short-term strength were at least partly composed of ‘asset-inflation’ from the results of the Fed’s QE2, ‘care & feeding’ of speculative stock and markets.  The coming end of QE2 is likely to reintroduce natural weakness.

There are always some impacts of supply/demand factors for commodities, more so than in stocks, but, the presence of manipulation for quick profits can’t be denied.  Lower prices in these groups are still possible, depending on the degree of the spread of world economic weakness, of the degree of safety required from effects of the debt crisis.

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