Fellow Board Members:
The Treasury yield curve (10Y - 3 Mo) has flattened considerably. The 10 year yield is now at all time (record) lows. Meanwhile gold is hitting at least 6- month highs, as well as the S&P 500 and Dow Industrial average. The Dow Transports have not followed suit. My technical indicators are positive.
I believe that things are getting really weird. The Zweig model (my version) is bullish. However, interest rates, including the Fed discount rate, which are the most significant part of the model, have not changed status for a very long time. This makes them neutral in the model, regardless of how closely one follows Zweig's rules.
I interpret this to mean at least two things:
(1) This is most likely a trader's market, probably on a several month time scale.
(2) "Something's gotta give," as the old saying goes. In other words, a big move is in the offing. Since stocks are near all-time highs, I would guess that the move would be downward. However, guesses like this are worthless.
That leaves us with my favorite saying: "When in doubt, do nothing." I am currently in doubt. If my view ever gets clearer, I will post it.
Good luck,
Tex
Posted by: mrweyl@hotmail.com
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