Time to buy beer and some smokes.

The consumer discretionary sector has been underperforming the consumer staples since 2005 and a new leg down looks ominous. Note the correlation between a weak XLY and a falling $NDX.

The land down under

Dive, dive, dive.

shelter from the storm?

Investors may seek $gold as a "safe" investment during times of market turbulence. However during times of volatility, even safe assets may suffer as managers sell anything that they can to raise liquidity. To wit, late summer 1998, $gold fell in August as nothing was immune to the turmoil caused by LTCM and the ruble crisis.

Other examples include 1994 (O.C. bankruptcy) and summer 2002 ($NDX capitulation).

Save the Date....

April 1 marks the beginning of the new fiscal year for Japan. Though hard to quantify, portfolio reallocation in Japan may be evident in price movements between now and mid-April, especially considering the large gains in Japanese equity markets that investors will attempt to lock-in.

Similarly, US investors may liquidate investments to raise cash for April 15. Anecdotally, many hedge funds have a window open prior to April 15 during which limited partners may request distributions.

Now that's a cup and handle.

The long-term price of $XAU vis-a-vis $COMPQ.

The long, long-term

Are the gold bugs right? Will gold outperform equities in the subsequent 1-12 months?

The O.C.

The last major Fed rate tightening cycle was in 1994 and the subsequent soft landing secured Greenspan's reputation as an infallible oracle. However 1994 was not without dislocations. The rising rate environment caused a few headaches with Orange County's bankruptcy as one of the the most notable financial stories of the year.

Key level to consider: the January low, which if broken may lead to fireworks. Notice the rapid collapse of the $NDX in late March 1994 as the January 1994 low's were broken coincident with rising short term rates.

rejected?

The SPY-TLT ratio remained in breakout territory between last Thursday and today, 3/6. However with today's reversal, is this a bull trap? Is there a negative divergence between the SPY and the SPY-TLT?

Danger, danger: will robinson

The $XBD is right at its geometric trendline from October 2005. As goes the $XBD, so goes the market?