This year has been a series of fits and starts with the USA economy jumping ahead and then pulling back. Currently, some of the economic indicators appear to be better while others seem to be degrading. One area that is pulling ahead is the housing market (see article), not to say that the mortgage mess is over with but, houses are starting to sell at higher prices, this bodes well for home-builders and for the housing material industry. On the flip side, Europe (see Greece 2012) and China (see China 2012) have their problems and this will effect the USA S&P 500 companies that had previously done well with their international sales.
The previous article on the USA economy from 1/24/2012 (on the home page), indicated a there were a few periods of Yield in the 2012 year. More importantly, the risk periods were fewer and of less potency then the previous years. The summer 2012 months as per the USA 2012 Delta Core/Transient graph, depict that core while in risk, is close to equilibrium - the transient while in yield is also close to equilibrium. Some of the upsurge in the USA economy in the July/August was from the factors shown in the USA graphs (transient) but, a good deal was indicated from the global charts especially (see Global for August 2012).
As would be expected, the USA economy at the beginning of September with the Labor Day holiday is likely not to have any impressive changes but, shortly afterward the Fed will be meeting again and as many have suggested, may provide additional easing. At about the middle of September (although could be at the early part of September), the core starts to move into yield and surges until mid-November indicating that the USA economy could see significant movement. It's important to note that the Global economy also starts a creep into yield at the beginning of September and stays slightly in yield during the fall months. The period later in November and into December in the USA 2012 Delta Core/Transient graph suggest issues with the "fiscal cliff" and more importantly, the Global graphs also indicate issues at the same time period.
To round up -- there is momentum in the USA economy that is supported by the Global economy, both of these suggesting that the USA could have a surge upward from September and continuing into October and part of November. November starts to get dicey — Europe could start boiling over again, China's leadership could falter, and the next trial date regarding Apple/Samsung could bring surprises and this does not even take into account the "USA fiscal cliff".
Disclosure as of 8/29/2012 - SPY is not part of our portfolio at this time.
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