The markets are slightly lower in early trading. The S&P 500 is lower for a second day, something we haven't seen since in several weeks. It's still early in the session, so the market could rebound and close strong. But if we do get a second down day, some investors will ask "Has the market momentum run out?"
In economic news, personal income came in much stronger than expected at +2.6% for December, but a big boost was from investors locking in capital gains ahead of a tax hike. The Chicago PMI for January rose to 55.6 from 50.0 last month.
Asian markets ended mostly lower. Japan's manuf. PMI improved to 47.7 from 45.0 last month. GDP in Taiwan rose +3.4%. And Hong Kong's retail sales rose 8.8%, above expectations.
Europe is also lower today, led down by Spain's -2% decline. In Germany, retail sales slid -1.7%, below expectations.
Stocks rising on earnings: QCOM, R, MA, UA, AN, MJN, OXY, DLR, HSY
Stocks falling on earnings: COP, DOW, UPS, AZN, ENR, D, HAR, ZMH, CL, LQDT
The dollar is slightly lower, but so are most commodities. Oil prices are down near $97.50 and gold prices are weaker to $1664. Silver and copper prices are lower as well.
The 10-year yield is hovering just below the 2.0% level at 1.99%. And the volatility index is up fractionally to 14.35.
Trading comment: We talked yesterday about this bull stampede getting a little long in the tooth and needing a rest. While that remains true I would expect dip buyers to step in after a small pullback and add to equities, as it seems like many investors remain underweight equities if we are truly in an environment where corporate profits are improving and the tailwind of housing market recovery boosts consumer and investor mindsets.
KAM Advisors has long positions in DLR and QCOM
31 Ocak 2013 Perşembe
The Spending Sequester Will Grow the Private Economy
Today’s report of a 0.1 percent GDP decline for the fourth quarter came as a surprise to most forecasters. But it actually masks considerable strength in the private economy. Namely, housing investment in the fourth quarter jumped 15.3 percent annually, business equipment and software spiked 12.4 percent, and real private final sales rose 2.6 percent. All in, the domestic private sector of the economy increased 3.4 percent annually -- a very respectable gain.
And here’s one for the record books: Working ahead of year-end tax hikes, individuals shifted so much money to the fourth quarter at the 35 percent top rate that personal income grew by 7.9 percent annually -- a huge number. And there’s more: In order to beat the tax man, dividend income rose 85.2 percent annually. You think tax incentives don’t matter? Guess again.
Now, all this private-sector strength occurred despite the fact that government spending -- namely military spending -- dropped 6.6 percent. Inventories also lost ground and the trade deficit widened.
But here’s a key point: Military spending has now fallen virtually to its lower sequester-spending-cut baseline. It did so in one quarter by about $40 billion. So the brunt of the impact over the coming years has already been felt. (Normally, as of recent years, military spending has been virtually flat.)
Which leads me to another key point: Even with the fourth-quarter contraction, the latest GDP report shows that falling government spending can coexist with rising private economic activity. This is an important point in terms of the upcoming spending sequester. Lower federal spending, limited government, and a smaller spending-to-GDP ratio will be good for growth. The military spending plunge will not likely be repeated. But by keeping resources in private hands, rather than transferring them to the inefficient government sector, the spending sequester is actually pro-growth.
Big-government Keynesians think big spending provides big growth. They are wrong. This has been a 2 percent recovery -- the worst in modern times -- dating back to 1947. So let’s try something different. Let’s shrink government. Let’s let the private sector breathe and generate entrepreneurship and risk-taking.
Spending is the true tax measure of the economy, according to Milton Friedman, Friedrich Hayek, and others. Even a modest sequester spending cut of maybe $60 billion in 2013, and perhaps more than $1 trillion over ten years (most of which will come from a slower spending growth rate, not real reductions), will be the best thing to inspire business and market confidence as well as international credibility. And it maybe even shave a point or two off the spending share of GDP.
On March 1 the spending sequester is supposed to kick in by law. If Congress wants to help the U.S. economy, the best thing it can do right now is implement this sequester. Then it can round out an even larger growth package, including large- and small-business tax reform and adjustments to stop entitlements from going bankrupt.
And here’s one for the record books: Working ahead of year-end tax hikes, individuals shifted so much money to the fourth quarter at the 35 percent top rate that personal income grew by 7.9 percent annually -- a huge number. And there’s more: In order to beat the tax man, dividend income rose 85.2 percent annually. You think tax incentives don’t matter? Guess again.
Now, all this private-sector strength occurred despite the fact that government spending -- namely military spending -- dropped 6.6 percent. Inventories also lost ground and the trade deficit widened.
But here’s a key point: Military spending has now fallen virtually to its lower sequester-spending-cut baseline. It did so in one quarter by about $40 billion. So the brunt of the impact over the coming years has already been felt. (Normally, as of recent years, military spending has been virtually flat.)
Which leads me to another key point: Even with the fourth-quarter contraction, the latest GDP report shows that falling government spending can coexist with rising private economic activity. This is an important point in terms of the upcoming spending sequester. Lower federal spending, limited government, and a smaller spending-to-GDP ratio will be good for growth. The military spending plunge will not likely be repeated. But by keeping resources in private hands, rather than transferring them to the inefficient government sector, the spending sequester is actually pro-growth.
Big-government Keynesians think big spending provides big growth. They are wrong. This has been a 2 percent recovery -- the worst in modern times -- dating back to 1947. So let’s try something different. Let’s shrink government. Let’s let the private sector breathe and generate entrepreneurship and risk-taking.
Spending is the true tax measure of the economy, according to Milton Friedman, Friedrich Hayek, and others. Even a modest sequester spending cut of maybe $60 billion in 2013, and perhaps more than $1 trillion over ten years (most of which will come from a slower spending growth rate, not real reductions), will be the best thing to inspire business and market confidence as well as international credibility. And it maybe even shave a point or two off the spending share of GDP.
On March 1 the spending sequester is supposed to kick in by law. If Congress wants to help the U.S. economy, the best thing it can do right now is implement this sequester. Then it can round out an even larger growth package, including large- and small-business tax reform and adjustments to stop entitlements from going bankrupt.
30 Ocak 2013 Çarşamba
How to Qualify for Student Loan Forgiveness
To most, loans are the only solution to pay their tuition fees and complete education. Student loans also help students pay for books and living expenses while schooling. Even though these loans are refunded at low interest rates, they can be a burden depending on the job, salary, or how fiscally savvy an individual is.
If you find yourself forced to live below your means or struggling to pay bills, applying for loan forgiveness will ease the financial encumbrance. Not everyone qualifies for loan forgiveness but most public servants do. Public Service Loan Forgiveness (PSLF) can be a thank you gift to public servants for dedicating their time and energy serving their country.
Organizations that offer student loan forgiveness
The following are not the only organizations that will offer loan forgiveness. Therefore, it's wise to consult with your employer, or carry out research online to find if your profession qualifies for loan forgiveness.
• The Association of Medical Colleges
• The American Federation of Teachers
• Providers of Intervention Services for Disabled Students
• Peace Corps Financial Benefit and Loan Deferment
• Nursing Education Loan Repayment Program (NELRP)
• National Health Services Corp
• Head Start Staff Student Loan Forgiveness Program
• College Cost Reduction and Access Act
• Child Care Provider Loan Forgiveness
• Armed Forces Student Loan Forgiveness Programs
• Americorps
• American Bar Association
According to the AES, “loan forgiveness programs encourage students to pursue an education that will lead to employment in specific occupations.” Loan forgiveness programs focus towards forgiving all or part of the loan as long as the borrower fulfills specific professional requirements. The government also uses loan forgiveness to increase personnel in areas that lack enough. An example is nursing shortage in the U.S.
The programs are only applicable to students who secured loans through the government. Such loans include Federal Ford Loan, Federal Stafford Loan, Federal Consolidation Loans, and Federal PLUS Loan. However, you qualify for Public Service Loan Forgiveness only if you have already made 120 payments under any of the programs while still employed although they don’t have to be concurrent.
To qualify for Indian Health Service Loan Repayment Program, health professionals should sign a two-year contract with an Indian health program. The program offers up to $48,000 coverage on student loans.
The Child Care Provider Loan Forgiveness Program will cover 20% of a borrower’s loan after serving two years, 20% for the next three years, and 30% onwards. To qualify, one must have served in a childcare facility and hold an early childhood education bachelor's or associate degree.
For vets, the Veterinary Medicine Loan Repayment Program (VMLRP) can offer up to $25,000 yearly. For approval, one has to serve in the National Institute of Food and Agriculture (NIFA).
Nursing Education Loan Repayment Program helps qualified nurses pay up to 60% of their education loan balance. The catch is they have to commit to a two-year contract and get 25% for a third year.
More information on Public Service Loan Forgiveness (PSLF) is available at studentaid.ed.gov.
By Eileen Eva
 |
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Organizations that offer student loan forgiveness
The following are not the only organizations that will offer loan forgiveness. Therefore, it's wise to consult with your employer, or carry out research online to find if your profession qualifies for loan forgiveness.
• The Association of Medical Colleges
• The American Federation of Teachers
• Providers of Intervention Services for Disabled Students
• Peace Corps Financial Benefit and Loan Deferment
• Nursing Education Loan Repayment Program (NELRP)
• National Health Services Corp
• Head Start Staff Student Loan Forgiveness Program
• College Cost Reduction and Access Act
• Child Care Provider Loan Forgiveness
• Armed Forces Student Loan Forgiveness Programs
• Americorps
• American Bar Association
According to the AES, “loan forgiveness programs encourage students to pursue an education that will lead to employment in specific occupations.” Loan forgiveness programs focus towards forgiving all or part of the loan as long as the borrower fulfills specific professional requirements. The government also uses loan forgiveness to increase personnel in areas that lack enough. An example is nursing shortage in the U.S.
The programs are only applicable to students who secured loans through the government. Such loans include Federal Ford Loan, Federal Stafford Loan, Federal Consolidation Loans, and Federal PLUS Loan. However, you qualify for Public Service Loan Forgiveness only if you have already made 120 payments under any of the programs while still employed although they don’t have to be concurrent.
To qualify for Indian Health Service Loan Repayment Program, health professionals should sign a two-year contract with an Indian health program. The program offers up to $48,000 coverage on student loans.
The Child Care Provider Loan Forgiveness Program will cover 20% of a borrower’s loan after serving two years, 20% for the next three years, and 30% onwards. To qualify, one must have served in a childcare facility and hold an early childhood education bachelor's or associate degree.
For vets, the Veterinary Medicine Loan Repayment Program (VMLRP) can offer up to $25,000 yearly. For approval, one has to serve in the National Institute of Food and Agriculture (NIFA).
Nursing Education Loan Repayment Program helps qualified nurses pay up to 60% of their education loan balance. The catch is they have to commit to a two-year contract and get 25% for a third year.
More information on Public Service Loan Forgiveness (PSLF) is available at studentaid.ed.gov.
By Eileen Eva
GDP Post Surprising Contraction in Q4
The markets are slightly lower in early trading, but it looks more like slight profit taking as opposed to a negative reaction to this morning's GDP report.
Q4 GDP came in at -0.1%, a surprising contraction in the face of consensus expectations for a 1.0% gain. But the headline figure looks weaker than what may be actually happening in the economy. Huge drops in govt spending and inventories lopped a large amount of growth from the calculations. But consumer spending, business investment, and housing remain on the upswing. So it's likely that the former two components will become less of a drag in Q1 and going forward.
Today we will hear from the FOMC and while no one is looking for a change in interest rate policy, many continue to look for hints as to when the Fed may alter its current asset purchase program. Given today's weak GDP print I think it is unlikely that the Fed will mention any altering of its game plan. Bernanke may discuss the path to exiting QE during his Q&A session if asked.
Elsewhere in economic news, today's ADP employment report showed private payrolls rose by 192,000 in January, above expectations for 175k increase. But this datapoint hasn't always correlated that well to Friday's official govt payrolls report.
Earnings reports continue to roll in. In a flip from yesterday, we are seeing more positive stock reactions than negative ones so far.
Stocks rising on earnings: AMZN, CVLT, BA, PJC, PSX, MAN, LLL, ADT, SLGN
Stocks falling on earnings: ROK, BXP
Asian markets were higher across the board overnight, led again by Japan. Europe is seeing declines this morning after Spain posted a Q4 GDP contraction of -0.7%.
The dollar index is lower today, mostly helping precious metals. Gold prices rallied to $1680 and silver prices are higher as well. Oil prices are roughly flat near $97.50.
The 10-year yield is getting another boost as Treasury bonds selloff. This is somewhat a surprising reaction to a weak GDP report, but could be indicative of further fund flows out of bonds. The 10-year is at 2.02% so far.
The VIX is also bouncing from last week's low levels in the 12s. So far it is up +5.7% back to the 14.0 level.
Trading comment: Buyers continue to funnel money into equities despite the market having one of its biggest runs since 2004 and reaching overbought levels. Bullish stampedes like the current one do run their course eventually. Raymond James like to say that they last on average 17-25 sessions with few pullbacks along the way. By their count we are at about day 20 today. Food for thought. Beyond what's going on in the major indexes, we want to focus on individual stocks and how they are faring in terms of price/volume action. On that front, fewer stocks have been making new highs in recent days which means the leadership in the market has been narrowing, another sign that the market is tiring.
KAM Advisors has long positions in PSX
Q4 GDP came in at -0.1%, a surprising contraction in the face of consensus expectations for a 1.0% gain. But the headline figure looks weaker than what may be actually happening in the economy. Huge drops in govt spending and inventories lopped a large amount of growth from the calculations. But consumer spending, business investment, and housing remain on the upswing. So it's likely that the former two components will become less of a drag in Q1 and going forward.
Today we will hear from the FOMC and while no one is looking for a change in interest rate policy, many continue to look for hints as to when the Fed may alter its current asset purchase program. Given today's weak GDP print I think it is unlikely that the Fed will mention any altering of its game plan. Bernanke may discuss the path to exiting QE during his Q&A session if asked.
Elsewhere in economic news, today's ADP employment report showed private payrolls rose by 192,000 in January, above expectations for 175k increase. But this datapoint hasn't always correlated that well to Friday's official govt payrolls report.
Earnings reports continue to roll in. In a flip from yesterday, we are seeing more positive stock reactions than negative ones so far.
Stocks rising on earnings: AMZN, CVLT, BA, PJC, PSX, MAN, LLL, ADT, SLGN
Stocks falling on earnings: ROK, BXP
Asian markets were higher across the board overnight, led again by Japan. Europe is seeing declines this morning after Spain posted a Q4 GDP contraction of -0.7%.
The dollar index is lower today, mostly helping precious metals. Gold prices rallied to $1680 and silver prices are higher as well. Oil prices are roughly flat near $97.50.
The 10-year yield is getting another boost as Treasury bonds selloff. This is somewhat a surprising reaction to a weak GDP report, but could be indicative of further fund flows out of bonds. The 10-year is at 2.02% so far.
The VIX is also bouncing from last week's low levels in the 12s. So far it is up +5.7% back to the 14.0 level.
Trading comment: Buyers continue to funnel money into equities despite the market having one of its biggest runs since 2004 and reaching overbought levels. Bullish stampedes like the current one do run their course eventually. Raymond James like to say that they last on average 17-25 sessions with few pullbacks along the way. By their count we are at about day 20 today. Food for thought. Beyond what's going on in the major indexes, we want to focus on individual stocks and how they are faring in terms of price/volume action. On that front, fewer stocks have been making new highs in recent days which means the leadership in the market has been narrowing, another sign that the market is tiring.
KAM Advisors has long positions in PSX
29 Ocak 2013 Salı
More Companies Issuing Cautious Guidance
The market is mixed in early trading with the S&P 500 up slightly but the Nasdaq down a little. As I looked over the stocks of companies that reported earnings last night and this morning I see more negative reactions than we saw last week. While many of these companies beat bottom line estimates, a fair amount either missed on the top line or issued cautious guidance.
Stocks rising on earnings: PFE, VLO, DHI, LLY, CIT, MSTR
Stocks falling on earnings: VMW, IDXX, F, EDU, ITW, EMC, TROW, HRS, ASH
In economic news, the Case-Shiller home price index for November rose 5.5%, another positive datapoint for the housing market. But the latest consumer confidence index came in lower at 58.6 vs. last month's reading of 66.7.
Asian markets were mostly higher overnight. The Reserve Bank of India cut rates 25 basis points to 7.75%. China closed +0.5% higher and is now up 20% from the December lows, enough to qualify for a new bull market.
Europe's markets are mostly lower today. Spain reported disappointing retail sales of -10.7%. And Eurozone officials are trying to involve Russia in Cyprus' bailout.
The 10-year yield is flat near 1.98% after touching the 2.00% level yesterday for the first time in 9 months.
The VIX is lower so far just below the 13.50 level.
Trading comment: The market remains short-term overbought, but has so far been stubborn in giving investors that pullback that many are looking for. Earnings reports have been a mixed bag and somewhat of a minefield. We still believe the best strategy is to focus on those stocks that exhibit positive reactions to earnings and then look to buy or add to positions on pullbacks. We don't want to chase the laggards in this environment.
KAM Advisors has long positions in VMW
Stocks rising on earnings: PFE, VLO, DHI, LLY, CIT, MSTR
Stocks falling on earnings: VMW, IDXX, F, EDU, ITW, EMC, TROW, HRS, ASH
In economic news, the Case-Shiller home price index for November rose 5.5%, another positive datapoint for the housing market. But the latest consumer confidence index came in lower at 58.6 vs. last month's reading of 66.7.
Asian markets were mostly higher overnight. The Reserve Bank of India cut rates 25 basis points to 7.75%. China closed +0.5% higher and is now up 20% from the December lows, enough to qualify for a new bull market.
Europe's markets are mostly lower today. Spain reported disappointing retail sales of -10.7%. And Eurozone officials are trying to involve Russia in Cyprus' bailout.
The 10-year yield is flat near 1.98% after touching the 2.00% level yesterday for the first time in 9 months.
The VIX is lower so far just below the 13.50 level.
Trading comment: The market remains short-term overbought, but has so far been stubborn in giving investors that pullback that many are looking for. Earnings reports have been a mixed bag and somewhat of a minefield. We still believe the best strategy is to focus on those stocks that exhibit positive reactions to earnings and then look to buy or add to positions on pullbacks. We don't want to chase the laggards in this environment.
KAM Advisors has long positions in VMW
28 Ocak 2013 Pazartesi
Monday Morning Musings
The markets are mixed in early trading. The S&P 500 is showing a modest pullback from its overbought condition while the Nasdaq is getting a boost from a rebound in AAPL this morning. It's hard to say if AAPL has bottomed for sure, but the volume of selling last Thursday and Friday does lend itself to that notion.
In economic news, durable goods orders came in much better than expectations rising +4.3% in December. Much of that was due to new aircraft orders, but even ex-transportation durable goods rose 1.3% which was better than expected.
Pending home sales declined 4.3% in December, which was below expectations. I wonder if some of this was due to the fiscal cliff uncertainty that included questions about the sustainability of the mortgage interest deduction.
A couple of notable names trading higher after reporting earnings this morning include CAT and BIIB.
Asian markets were mostly higher overnight, led by a 2.4% rise in China after a PBOC governor expects the country's GDP to reach 8.0% in 2013. Standard Charter sees 8.3%. In Japan, the cabinet is looking for 2.5% GDP growth this year, which would be a big rebound.
Europe's markets are seeing little change so far. An ECB member said the Eurozone would have to fall back into recession before they lowered interest rates further. Aren't they basically in recession now??
The 10-year yield is bouncing again as the rotation out of bond funds continues. The yield hit 2.00% this morning, which is a 9-month high and above recent resistance.
And the volatility index is breaking above its recent range also, rising +7% this morning to the 13.75 level. That's still a low absolute level, but the VIX may have bottomed for now.
Trading comment: Last week we commented that the S&P 500 was overbought on several different indicators we follow. But that didn't stop the market from reaching new multi-year highs on Friday. This morning's weakness could be the start of a small pullback, but we will have to see how the market closes. So far this year, every intraday dip has been bought into and by the close the market tends to rally back. Let's see if that patter surfaces again today.
KAM Advisors has long positions in AAPL
In economic news, durable goods orders came in much better than expectations rising +4.3% in December. Much of that was due to new aircraft orders, but even ex-transportation durable goods rose 1.3% which was better than expected.
Pending home sales declined 4.3% in December, which was below expectations. I wonder if some of this was due to the fiscal cliff uncertainty that included questions about the sustainability of the mortgage interest deduction.
A couple of notable names trading higher after reporting earnings this morning include CAT and BIIB.
Asian markets were mostly higher overnight, led by a 2.4% rise in China after a PBOC governor expects the country's GDP to reach 8.0% in 2013. Standard Charter sees 8.3%. In Japan, the cabinet is looking for 2.5% GDP growth this year, which would be a big rebound.
Europe's markets are seeing little change so far. An ECB member said the Eurozone would have to fall back into recession before they lowered interest rates further. Aren't they basically in recession now??
The 10-year yield is bouncing again as the rotation out of bond funds continues. The yield hit 2.00% this morning, which is a 9-month high and above recent resistance.
And the volatility index is breaking above its recent range also, rising +7% this morning to the 13.75 level. That's still a low absolute level, but the VIX may have bottomed for now.
Trading comment: Last week we commented that the S&P 500 was overbought on several different indicators we follow. But that didn't stop the market from reaching new multi-year highs on Friday. This morning's weakness could be the start of a small pullback, but we will have to see how the market closes. So far this year, every intraday dip has been bought into and by the close the market tends to rally back. Let's see if that patter surfaces again today.
KAM Advisors has long positions in AAPL
27 Ocak 2013 Pazar
HAS THE FIRST CURRENCY CRISIS BEGUN?
As many of you who have read my work in the past know, I expect the eventual endgame to this whole Keynesian monetary experiment that has been going on ever since World War II, to finally terminate in a global currency crisis. I'm starting to wonder if we aren't seeing the first domino start to topple.
I'm talking about the Japanese Yen of course.
I think everyone just naturally assumes that the Yen is dropping in response to Prime Minister Abe's intent to imitate US policy and print it's way out of its troubles. The problem with this strategy is of course, eventually you will break your currency. Japan is in a particularly tenuous situation in that their debt to GDP dwarfs most of the rest of the world. The only hope they have of servicing this debt is for interest rates to stay basically at zero.
Any move by interest rates above this artificially low level and Japan's debt becomes unserviceable, without resorting to a greater and greater debasement of the currency. Unfortunately that will also result in an acceleration of the collapse of the currency, which would just cause Japanese bonds to be sold even more aggressively. A nasty catch-22 situation.
At this point there is no way out for Japan. The only question is when will the endgame arrive. Japanese bond bears have been asking themselves that question for almost 2 decades.
The recent move in the Yen has started me wondering if that end game hasn't now begun.
In the chart below I have marked the successive yearly cycle lows with blue arrows. As you can see this major cycle bottom tends to arrive between March and May most years. If the 2013 yearly cycle low arrives in the normal timing band, then there may be a big problem developing with the Japanese currency. The reason I say that is because the Japanese Yen is basically already in free fall and we may still have another one-three months to go before a final bottom.
Another warning sign is the fact that this decline cut through not only the 2012 yearly cycle low, but also the 2011 yearly cycle low and never even blinked. In an orderly decline both of these levels should have generated at least a decent bear market rally. In my opinion, it's very worrisome that the Yen didn't even slow down as it moved through these major support levels.
The next major support level is at the 2010 yearly cycle pivot. If the Yen slices through this support level also, then I think we have a major currency crisis on our hands.
Needless to say if the world sees a major currency collapse, which up to this point I think most people would consider to be an absurd idea, it's going to spark a panic for protection. Despite stocks entering the euphoria stage of this bull market, stocks are not going to protect one from a currency crisis. Only hard assets will do that, and the two hard assets that are best at protecting one's wealth are gold and silver.
Wouldn't it be fitting that at a time when gold and silver are about to be most cherished, they are now completely loathed by the market?
I'm talking about the Japanese Yen of course.
I think everyone just naturally assumes that the Yen is dropping in response to Prime Minister Abe's intent to imitate US policy and print it's way out of its troubles. The problem with this strategy is of course, eventually you will break your currency. Japan is in a particularly tenuous situation in that their debt to GDP dwarfs most of the rest of the world. The only hope they have of servicing this debt is for interest rates to stay basically at zero.
Any move by interest rates above this artificially low level and Japan's debt becomes unserviceable, without resorting to a greater and greater debasement of the currency. Unfortunately that will also result in an acceleration of the collapse of the currency, which would just cause Japanese bonds to be sold even more aggressively. A nasty catch-22 situation.
At this point there is no way out for Japan. The only question is when will the endgame arrive. Japanese bond bears have been asking themselves that question for almost 2 decades.
The recent move in the Yen has started me wondering if that end game hasn't now begun.
In the chart below I have marked the successive yearly cycle lows with blue arrows. As you can see this major cycle bottom tends to arrive between March and May most years. If the 2013 yearly cycle low arrives in the normal timing band, then there may be a big problem developing with the Japanese currency. The reason I say that is because the Japanese Yen is basically already in free fall and we may still have another one-three months to go before a final bottom.
Another warning sign is the fact that this decline cut through not only the 2012 yearly cycle low, but also the 2011 yearly cycle low and never even blinked. In an orderly decline both of these levels should have generated at least a decent bear market rally. In my opinion, it's very worrisome that the Yen didn't even slow down as it moved through these major support levels.
The next major support level is at the 2010 yearly cycle pivot. If the Yen slices through this support level also, then I think we have a major currency crisis on our hands.
Needless to say if the world sees a major currency collapse, which up to this point I think most people would consider to be an absurd idea, it's going to spark a panic for protection. Despite stocks entering the euphoria stage of this bull market, stocks are not going to protect one from a currency crisis. Only hard assets will do that, and the two hard assets that are best at protecting one's wealth are gold and silver.
Wouldn't it be fitting that at a time when gold and silver are about to be most cherished, they are now completely loathed by the market?
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