Kick ‘Em When They’re Down

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Good trading all.

Steve Chapman, TRI

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4 comments on Kick ‘Em When They’re Down

  1. kenneth
    March 25, 2014 at 12:41 AM (3 years ago)

    Hi Steve,
    It looks to me like we have have a PSAR 9 20 MA sell signal on the RUT. Do you concur ?
    SPX looks to be close also.

    • Steve Chapman
      March 25, 2014 at 6:09 AM (3 years ago)

      I am hesitant to short the indexes until they have a major technical breakdown. Everything that has looked like a normal sell signal has failed. It will be one of those things like we just saw in gold where price continues to go up and up and then one day when the selling starts it goes further than most people expect. US Stocks have been the strongest asset class in the world and it is tough to pick a top.

  2. apple
    March 25, 2014 at 1:38 AM (3 years ago)

    Your recent posts have stated that you expect a bottoming of stocks and metals in 2016 or so. That 2014 should still be decent for equities but after that it will be a tough 15/16. Logically that would include all hard assets as well as it will be a deflationary period. As stated that will lead to another bull run in bonds. My question is how all this will affect the commercial real estate business which is, at least in the Multi family sector, booming at this point. As a hard asset, it should suffer along with all the other assets, however, historically, falling interest rates are normally very bullish for that asset class. Furthermore, the last couple of cycles in that business have been averaging around 9 years or so which would put the peak in 2016.

    • Steve Chapman
      March 25, 2014 at 6:13 AM (3 years ago)

      One of my family members is a senior VP of one of the largest public commercial real estate companies. They own a huge percentage of the malls and high-end shopping in the Western United States. They are struggling under the surface, but because of special terms the illusion is being upheld. I think a deflationary event would hit them to some extent, but corporate balance sheets are strong right now and they will likely get through it. I don’t think 2008 will happen again, but we still could get a correction that refreshes the credit cycle.