Deflation concerns may force me to sell gold
Steve Cook on Disciplined Investing

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Economics

   This Week’s Data

    The International Council of Shopping Centers reported weekly sales of major retailers up .8% from the prior week but down .4% on a year over year basis; Redbook Research reported month to date retail chain store sales up .9% versus the comparable period in 2008.

    February business inventories fell 1.3% versus expectations of a 1.2% decline; as important, business sales rose .2%, thereby driving down the business inventory to sales ratio.
    http://econompicdata.blogspot.com/2009/04/inventories-continue-to-fall.html

   Other

    Foreclosures not likely to abate:
    http://www.ritholtz.com/blog/2009/04/foreclosure-abatements-ending/

    Used car prices versus the S&P:
    http://bespokeinvest.typepad.com/bespoke/2009/04/used-car-sale-prices-vs-sp-500.html

    Credit default swap index versus the S & P:
    http://bespokeinvest.typepad.com/bespoke/2009/04/credit-default-swap-index-vs-sp-500.html

Politics

  Domestic

  International War Against Radical Islam

The Market
    
    Technical

    The DJIA (7920) declined below the 7949 resistance level as well as the short term up trend off its March lows (7930); while the S& P (841) closed above its late March high (834) and right on the short term up trend (841).  Stock prices have labored the last couple of days and seem to be again struggling with the current level.  The resolution to this struggle will likely take prices to either the next most easily identifiable potential resistance level is DJIA 8401, S&P 876 or the minor support level at DJIA 7437, S&P 740.  As I noted yesterday, I will be a  Seller at the S&P 875-880 level and Buyer at  S&P 740. 

    Update from TraderFeed (he thinks that the pin action suggests higher prices):
    http://traderfeed.blogspot.com/2009/04/indicator-update-for-april-14th.html





   
    Gold also continues to hover near an important support level.  Despite my conviction that the US economy will be plagued by powerful inflationary pressures as it starts to recover, if the current trade is disinflation, I am not going to argue.  Our Portfolios will Sell their gold positions and wait to Buy them back



  





Posted 04-15-2009 8:18 AM by Steve Cook