Evidence Investing

This article at cnbc.com shows something really interesting. 

Things are so unstable right now, right?  Maybe its time to get into bonds now?  Or is it?

Let see what Bill Gross has to say.  He's THE big bond guy at Pimco, as I am sure you know.  He manages the biggest bond fund in the world...$1 trillion!  Bonds is this guy's life...or is it?

Here's what he is saying:   “We are making a move into equities, period,” said Gross. “We are recognizing that the global marketplace is not just bond-oriented, and so equities have a place, always have had a place.”

The mouse is Greece (and Portugal).  Who's the elephant in the possibly-defalting-national-debt room?

Ding Ding Ding!  Spain is!

Bespoke.com - This month's weaker than expected retail sales was primariliy due to the sharp decline in sales of building materials (which includes lawn and garden products).  After two straight months where sales of building materials rose by more than 8%, May's receipts showed a record decline of 9.3%. 

Sorry about the gap in postings...Went on a short vacation to Mexico.  But now I'm back in the saddle, so keep checking in.  :)

BeSpoke.com gave me a heads up on this: 

The TRIN index is a market indicator that measures market breadth and volume.  A more detailed description of the indicator can be found at Investopedia, but to describe it quickly, the TRIN measures the ratio of up stocks to down stocks and then divides that number by the ratio of volume in up stocks to volume in down stocks.  When the ratio is above one it indicates that volume in declining stocks is greater than the volume in rising stocks, while readings below one indicate that more volume is going into up stocks than down stocks.

We often look at the ten-day average.  In the chart below, we highlight the 10-day average TRIN over the last several years.  As shown, at a current level of 2.53 there has only been one other period since 2002 where the indicator was higher than it currently is.  Surprisingly, that one occurrence was not during the heart of the bear market from October 2007 through March 2009.  It has been only at this level previously right before the bear market, in March 2007 when the S&P 500 saw a 5% correction as the first cracks of the sub-prime crisis began to emerge.  Following that correction, the S&P 500 quickly recovered and hit new highs within a matter of weeks.  It wasn't until seven months later, in October 2007 that the S&P 500 finally peaked at 1,565.15.

Interesting article from the popular press about Robert Arnott and his firm Research Affiliates...  Cool stuff.
You can enlarge with the buttons at the bottom of the embedded area.

Individual bankruptcies increase...

Well, its been ugly....  The S&P is about where it was 6 months ago...

One of the indicators I use for very broad 'invested versus cash' type decisions is the 12 period Simple Moving Average on a monthly chart.  Its simple, slightly better than the 1o SMA or EMA.  Its NOT tactical at all...really strategic, at best.  Yet, very convincing:

So we are just squeaking by in bullish territory...  Holding on by the skin of our teeth.  The tipping point is 1072 for the S&P....and it has to be a monthly CLOSE below that level.  So stay tuned for another up-date at the end of June.

I know I have posted about the US debt and how we are still in trouble...and I still believe every word of it.  But here is a good prespective on why people are still running to US treasury bonds when things get iffy. 

If you want to be in 'safe' government bonds (G7), the US is still one of the best...for now.

Here is the same type of view which may explain why emerging currency has been doing rather well...