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Market Comment May 3 2013

May 3, 2013 - 

In the words of a great philosopher:
Don’t tug on Superman’s Cape and Don’t Pee into the Wind

Or as they say on Wall Street:
Don’t fight the tape” or “When in doubt Get Out

As you will recall last week many of my indicators were turning bullish, but I was not listening, still sceptical I found some disturbing trends, specifically some market leaders pulling back, Transports lagging, smaller caps trailing large cap, the NYSE % of stocks over 50 day moving average. Worst of all was this disturbing raising of both the value of the 20 year treasury bond and the market. They can't both go up together for long. Well this week the US non-farm employment report was fantastic, so the treasury Bonds broke trend. I am going to put up the candles on this graph so you can see how bad Friday was for the 20 Year T-Bond.

 (click on any graphic to see it larger)

Yikes! this was the moment life in the bear suit got a tad too warm. My guess that the market would drop and treasures would hold, did not happen. I liquidated HDGE. Fortunately I did not bet the farm and my dominant position remains in cash.      

Lets see What is leading and Lagging this week

Doing Well:
Emerging Markets

What is Selling Off:

Clearly the commodities bubble is still deflating, and we continue to swim in oil.
West Texas Crude came back a little this week, but Brent is still very weak.

Technology got a boost this week, the debate is this because things are looking better in Technology or is this the last part of the market not overbought?

Speaking of technology, Google has the new crown for Tech innovation leader over Amazon and Apple as Google grinds it way up to $1000??

Also the US consumer is doing well as retailers see trafic return to the malls. But hey it does still look like last May so far. 

Even the Emerging Markets are doing better lately

Here is something interesting, Agriculture is getting a bit of a rise:

Good news for Saskatchewan and the king of fertilizer, Potash Corp:

Notice the green background is the 250 day moving average which looks to be finally turning around or at least the bleeding has stopping.   

We will see what next week brings but for now I am:
- Mostly in cash
- Have some super stable dividend plays
- Am short Cdn markets, Gold miners and Oil (in a small way).  

If we pull back I will add to my shorts, but stay mostly in cash. If we stay strong I will looks at some low risk plays. 

Have a great weekend.