The TSX Composite fell a nasty 6.9 per cent this past week.

S&P 500 STRATEGY: STAND ASIDE (for definitions of terms see end of report)

Once again all indicators have turned down across all time frames. The S&P 500’s fall this past week was spurred on by a series of poor economic numbers. Friday’s unemployment numbers, while worse than expected, actually resulted in an up day for the market because everyone thought the Fed will now have to cut interest rates again.

Interest rates are nowhere near the lows seen for the 2002 recession. That would require another 125 bp of cuts. Still, we might get that because given the collapses in the job market, the housing market and the debt market, they will have to hyper-inflate in order to save the economy. Difficult, when everything is pointing to massive deflation. Money supply is contracting, the granting of credit is at a standstill and the jobless rate is the highest in years. We have now matched the unemployment highs seen in 2003, at the bottom of the 2002 recession. And we are barely into this one. We could see the highs of the 1990 recession or even the 1982 recession that reached into double figures. The Great Depression saw unemployment of 25 per cent. [read more…]

TSX INDICES

As much as the previous week was up, up, up this past week was down, down, down. And what a down week as it lambasted even the most ardent bull. There was absolutely no where to hide. Lots of calls this week from those wishing to slit their throats, leap from high buildings or stand in front of a train. Course here we are lucky. Our office is on the second floor with a tree right outside the window and my razor is electric. So do we know any good railroad trestles? If desires of suicide are rampant can a bottom be far behind?

The TSX Composite fell a nasty 6.9 per cent this past week. We lost some 954 points. Not one sector was up on the week. Those in the gold, materials and the CDNX Venture Exchange saw new lows for the move down. The fundamentals for gold and precious metals remains very strong but the technicals are in a meltdown giving true meaning to the term “technical correction”. IS there any good news? Well yes gold, silver and PM stocks are still above their 2007 lows.[read more…]