Thread: Bullish & Bearish Factors

While last week, market showed bullish behavior in face of many bad news, few things are still raising red flags.

1. Volume has been decreasing similar to last few bear rallies.
2. Run to treasury and Yen is still on ( dollar is still going down).
3. Market has been running into resistence and has been unable to break it, and now, threatening to break on the lower side of the wedge.
4. Indicators (e.g. stochastic) is now in overbought territory.

thats right my friend....

Things are all mingling up..... lots of confusion and little of uniformity.

Deflation is much more of a problem for the US economy than inflation. Since oil prices are more than 75 percent off their highs. As a result, we have seen either flat or negative consumer price growth every month between August and November. The December numbers have yet to be release, but there is no reason to expect CPI to turn positive. Since the beginning of the year annualized consumer price growth has fallen from 2.1 to 1.1 percent. The US economy has not officially hit deflationary conditions, but with commodity prices continuing to fall and consumer demand slumping, deflation will become a greater risk than inflation in the first half of 2009. However this may change in the second half as Quantitative Easing, fiscal stimulus and hopefully a weaker currency boosts inflation.