Month: March 2012

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Sterling Market Commentary for Tuesday March 6th, 2012

March 6, 2012 sterlinginvestments 0

In my review of the charts from yesterday’s trading activity I noticed that the vast majority of the various indices I track appear to be starting to move lower. This is generally a bearish signal for the overall market. The second thing I noticed was the vast majority of the heavy volume stocks appear to be moving lower, another bearish signal for the overall market. It looks to me as if we are starting a market pullback. If that is the case, then I expect the Dow Jones Industrial Average to move lower and test support at 12,719.49 If that level fails to hold support on the Dow Jones Industrial Average, then I see a good possibility that the Dow Industrials will move lower and test …..

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Sterling Market Commentary for Monday March 5th, 2012

March 5, 2012 sterlinginvestments 0

In looking at the charts from Friday’s market activity I noticed three (3) things that really stood out. The first thing I noticed is that a majority of the sector indices I looked at had negative chart patterns. This is generally a precursor for a broader market pullback. The second thing I noticed was very few of the stocks setting new yearly highs had average daily trading volume above 1 million shares. To me, this indicates that the larger companies are not participating as much in the recent market rally. The third thing I noticed was the majority of the stocks with heavy volume looked to be moving lower. This is generally a bearish trading signal.

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Sterling Weekly for the Week of March 5th, 2012 – A Look at Bond Prices and Higher Rates

March 5, 2012 sterlinginvestments 0

Regular readers of the Sterling Weekly will recall that I have been voicing my concerns about the Fed’s manipulation of interest rates to abnormally low levels for quite some time. I have expressed my concerns that this is inflationary in nature, and that as a result we could see interest rates rise to levels not seen since the mid to late 1990’s when the 30-Year Bond yielded approximately 7.5%. (Sterling Weekly for September 26th, 2011) I thought it would be a good idea to take a look how an increase in interest rates would affect the price of current government bonds.

As of last Friday March 2nd, the US Government 5-Year Bonds was yielding approximately 0.85%, the 10-Year Bond was yielding approximately 1.99%, and 30-Year Bond was yielding approximately 3.14%. I have said for a very long time that I believe these bond yields are artificially low due to their manipulation by the Federal Reserve. I think that this is causing a bubble in the bond market that could have very disastrous consequence when it finally bursts, as all bubble ultimately do.

I think that it is very realistic to expect that we will see the price of US Government bonds return to their pre-2008 levels at some point in the reasonable future, by this I mean interest rate levels seen…..