Bending the Third Rail
Because We Should, We Can, We Do
Friday, March 17, 2006
March CPI/Stock Market
As most of you know, I'm fairly pessimistic about the economy in the long term. I think we're headed for a period of "stagflation". Yestereday's consumer price index came in quite tepid:

This is good news. But I also think it's short term good news. With another round of energy price increses inevitable, I can't believe the uptrend won't be supported by future reports to the upside.

Here's hoping I'm wrong!

On another front, there's this via Barry at the Big Picture:

What this chart says is that while the S&P is charging ahead in the market, institutional money is drying up. If this continues, it's not a good sign for small investors. It's my experience the big guys run up the market, generating a lot of buzz. Then they stop buying, letting the small guys continue to the upswing. This is a "topping" process in the market. The next step will be for the large institutional money flows to start leaving the market (if that hasn't happened already), letting the little guys get stuck without a chair in the stock market "musical chairs".

If you're heavily invested in the stock market, watch out!