I’m listening to CNBC’s discussion of today’s sell off, and I am astonished to learn that there is Inflation and a Slowing Economy!
Of course, those topics have been discussed in these pages for nearly a year now. The issue with these macro-economic concerns is ALWAYS one of timing. Why? You cannot trade off of macro-economics unless you have a v e r y long time horizon. It takes months, quarters and sometimes years for economic issues to work their way thru to the kinda-sorta-eventually-mostly efficient markets. Thats why mating technicals to macro-economics gives you a glimpse into both the longer and shorter term events.
As to today’s issues: I hate to be blunt, but if on April 20, 2005, you are first discovering that this economy has inflationary pressure – more than 2 years after the CRB rally began — then Lucy, you have some splainin’ to do.
Just discover GDP has been slowing? (duh) Follow the numbers: Q3 ’03=7.4% (originally reported as almost 9%), Q4 ’03 4.2% (orig 6+%), then 2004 Q1-4 data: 4.5, 3.3, 4.0, 3.8.
I plan on addressing the problems investors face when trying to balance these competing, and often contradictory, time frame issues.