[Market Outlook] Cosmic Bubbles

Cosmic Bubbles April 24th, 2016 Keith Schneider        CEO, MarketGauge.com  US Equities Markets floated mostly upward with the exception of the NASDQ whose bubble got popped by bad earnings from Microsoft, Facebook, and Google. It ended the week down -1.5 % and lags the S&P 500 this year by 5%. The dramatic photo above is from the Hubble telescope that captured a giant star in the constellation Cassiopeia blowing bubbles. It is so hot and bright that it launches its own gas into space thereby creating a massive bubble. You can decide if it’s only a coincidence but this massive bubble is more than seven light years wide, about the same interval that central banks have been blowing hard on the monetary bubble down here on planet earth.  Could it be that effects of the monetary bubble being blown has reached cosmic proportions and reached the far ends of the universe?  The question is just how much more monetary gas can this bubble tolerate before it blows. The cover article in this weeks’ Time magazine was written by Jim Grant publisher of “Grants Interest Rate Observer” and one of the world’s most respected financial publishers and analysts. He  has sparked a national debate as US debt levels approach an inflection point. For the last several months, gold, silver and commodities in general have come back to life. Last week we highlighted that silver was catching fire and by the close of the week it closed up over 4% (even after retreating some 2% from Fridays intraday highs) and well out performing gold which closed flat. In fact, silver as measured by its annual momentum is now the strongest in almost five years.  These are inflationary indications and could be indicating that the central banks are behind the curve. Bonds broke its 50 day moving average and looks the weakest since this year began with its inertia failing. The bigger longer term trends are still intact and the bond market needs to hold these levels or this could the start of a long overdue correction with unknown implications. Let’s go to this week’s video where will be taking a deeper cut into the interest rate picture. Click here for this weeks video.

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