Ryan Puplava's Blog

Nothing can be more in-your-face to the secular bear market call as new all-time highs in a market. Whether we’re talking about equities, commodities, or bonds, when a security hits new all-time highs it should be the check and mate of a bearish call.

Today, we got the ECB meeting and the Chinese trade metrics – both of which were bullish catalysts for commodities. The effects of both announcements today were effective in bidding up the euro and supplying the market with U.S. dollars.

The Fed minutes from the December meeting were released today and they threw a slight curve ball on the day’s events and on inflationary expectations (no doubt by design). It appears that the voting members are equally divided between those who would like to see QE end in 2013 and those that want to see it continue beyond 2013.

If you’re one of our weekend Financial Sense Newshour listeners, then you have no doubt heard me discuss how the Chinese economy has been stabilizing after a number of accommodative moves by the People’s Bank of China (PBOC) have been implemented since this summer.

Post the November 6th election, much of the market focus has been on the Fiscal Cliff. That’s not to say that economic announcements, a Greek bailout, Hamas, and Sandy haven’t been factors; however, when you look at the market tape, the big moves have been made based on comments from Congressional leaders and the White House.

Is this the start of a new bear market? Will equities drop 30, 40, or 50 percent from here? It’s a possibility. The break of a two-year bearish wedge is a major concern, but it’s way too soon to make those calls based on how the market is trading now. That is why I continue to read or hear diverging opinions on the matter.

An ongoing issue since the earnings season kicked off has been the focus shift for investors from macro to micro. That is to say that investors are less concerned about economic trends in Europe, China, and the U.S. than they are with industry and company trends as discussed in earnings announcements over the past two weeks.

At the end of 2011, PFS Group began investing in Financials and Homebuilders for the first time since the 2009 market recovery. We advised the public and our clients to stay clear of the group when we began to talk about the coming demise in financials and housing in 2005 and 2006.

Today, natural gas has officially established a bottom in the technical sense of the word. Whether it’s a secular bottom or just a bottom over the next several months, it will take time to answer that question. Additionally, coal stocks have found a pulse just when we all thought they were flatlining.

One of the key points I’ve been emphasizing on the radio show (besides Europe) is the non-confirmation of the Dow Jones Industrial Average by the Dow Jones Transportation Index. I also mentioned last week that this was one of the factors in the process of forming a market top. While this is a warning sign, it is not a signal to become bearish on stocks.