A Very Shaky Start to the 2nd Half of 2011

More and more so called "smart money" managers are starting to call time on this bull market. Marc Faber is increasingly bearish. One of the things he said was on 4 July 2011.

"We Can Rally To 1330, But August, September-October Will Be Rough Months

I think we can rally to around 1,330 on the S&P now, but not make a new high above the 1,370 highs, which we saw in May. And then, in my view, we would be going down to maybe 1,150 on the S&P.

I think the second half of August, September-October will be rough months. - BeaconEquity"

 

Jeremy Grantham of GMO said that he has turned bearish on stocks. He thinks that the persistently high commodity prices will shorten the bull run in developed countries.

 

The latest data from US seems to point to stagflation. Core inflation rose by 0.3% mom. This means 3.6% annualised. If core CPI hits above 2.5%, the US will surely run out of options.

 

The rebound of stocks that started early this month seems to have stalled. Credit spreads have begun to creep up again.

 

Hang on to your horses. We'll know by Sep if the bull has ended.