Friday, August 13, 2010

Trouble with the Financials; and the Borg

I have highlighted this market problem months ago, when JPM and GS began breaking down on the charts. I believe such issues as the yield curve flattening are hurting.
In addition to the severe chart damage that C and BAC have suffered, a much more obscure bank/financial services company, UMB Financial,
has broken to a 12 month low and within about half a point of its March, 2009 low. What is noteworthy is that the company recently announced a blowout quarter to the upside, and analysts took their 2010 and 2011 numbers up sharply. That this stock should collapse strikes me as a warning sign that the "troops" are not doing their jobs, no matter if GS and JPM should be "not too bad" right now.
As stated in this space ad infinitum, gold and Treasuries are in bull markets. The most probably outcome in my world is that they meet for a championship fight in the near or distant future. In the meantime, the dictum is to not fight the Fed. Gentle Ben wants lower interest rates. The economy is taking another dive. The gold market rallies on debt monetization. Both the bond and gold are like the Borg. Resistance has been futile. I don't see anything to change those parallel trends.
Copyright (C) Long Lake LLC 2010

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