Tuesday, February 4, 2014

The Weekly Outlook - The Pricing Dilemma

**** The past few years, since 2009 to be exact, we have seen a rise in the markets to new highs. Along with that rise I have also witnessed that there are less of the major players volatile enough to trade in a reasonable price range. In other words either the volume has dried up or the prices have risen so much that it makes it impossible for most non-professional traders without big accounts to trade them.

Time was that we traded $GOOG, $AMZN  at much lower prices along with others like $AZO, $ISRG, $MA. I remember $CME, $CAT $FCX  $MON to have nice ranges, and along with good volume to move them more than a few dimes a day. Now they have lost daily volume and ranges became tight. I suppose it's the price you pay for good rise in the markets, yet I wonder if it's really good for us.

Given the premise that the markets predict the future economy, then we are either heading for hyper- inflation and a much more divided society that gives socialists strength. The two-class system that they like to create  dependence and true elitism,  can only be thwarted by a strong middle class. The market was an opportunity  for the  middle class as well as the super rich, and even the savvy poor,  to have a chance to grow wealth at a better pace than bank interest rates. Now, however,  I wonder how many are investing or better put, how many can invest even if they are not scared off by the past decade and half of events.  

If there is a conspiracy to divide the society it is certainly helped by the over exuberant rise of the market this past year and hyper - inflation would just price most of the people out of it completely, creating a much more divided society; resulting in perhaps near total disappearance of the middle class along with the USA.

I'm sure not everyone will see it my way yet I wonder if it were not better to have let the 2007 crisis play itself out naturally, rather that a government fueling the fire to create what we have now. Debt and inflation;  most of which they hide from reports. We may have had the survival of the fittest to carry on but from the ashes would have risen much more opportunity in my humble opinion.

So as you may dread a correction in the markets, I assure you it 's for the good. Look at history; it has always come back stronger. The unfortunate part of the scenario now is that once the government involves itself especially like it had for the past 7 years, they have a harder time not to step in once again.


Happy Trading, Living and Dancing
Anni

The Weekly Outlook  $DJIA $SPX $NDX  was posted on YouTube on Monday  we have now reached the regions  I have mentioned and further downside is possible.

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