Featured Trades: (THE NEW ASSET BUBBLE)
1) There is only one trade right now, and that is 'Risk On.' I noticed that I have had trouble composing my newsletter lately because in thumbnail form, all charts now look the same, those of a gull winged 'V's'. Looking at the long list of positions that I have recommended this year, including municipal, junk, and corporate bonds, emerging market ETF's, Toyota, the US, Australian, and Canadian dollars against the euro and the yen, silver, platinum, and palladium, oil, commodities, I am stunned to see all of them working, some quite dramatically so. I can assure you this is not because I am a genius, or suddenly acquired the touch of Midas or the wisdom of Croesus. All assets are going up, period. Fundamental research has become an irrelevance. Earnings and GDP forecasts are being ratcheted up by the day. The S&P 500 has gone up for 400 days now without a 10% pullback, and we have seen the fourth strongest stock market rally in a century. There is vastly more risk in the market than there was 13 months ago. Of course, I blame zero interest rates for everything, and the Fed's need to inflate new bubbles to rescue us from the old ones. It also helps that Obama turned out to be a moderate in liberal clothing. There is only one problem with this scenario. If everything is moving up in unison, you can expect them to go down the same way when the premise for their prosperity disappears. The tip off was the way everything moved in lockstep the day the sushi hit the fan on Goldman Sachs (GS). Take that as a wakeup call, and adjust your risk controls accordingly. Keep a hair trigger on your mouse for when the 'Risk Off' trade hits.