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Dan Shaffer of Shaffer Asset Management and MKM Partners managing director Katie Stockton debate the future of the markets.
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And thanks Nicole.
And -- off to a rough start this morning but.
With equities near their highest level ever.
Is this just a blip on the radar signs of more problems that come joining us now to duke it out we had Dan Schaefer Schaefer asset management.
And Katie Stockton in -- and partners chief market technician.
Thanks for being listened and Katie let's start with you what do you think of these markets some people are get a little nurse were up almost 7% just since Jan one.
Above the market -- basically has strong positive momentum and I generally recommend investors stay on the same side -- that momentum.
So I'm pretty abolished here -- do think LLC followed very even after January's very strong month an S&P 500 it was up 5%.
Technically we didn't we see if 5% class -- month in January.
It bodes well for a strong year for the broader market so longer term -- meant to miss some very healthy.
And even if it over the next couple of weeks in February I think they can sustain these overbought conditions that I've been registered.
For another couple few weeks ultimately giving way to a correction may be -- act to -- percent.
And then back to back up after that correction all right and Dan -- you -- in contrast that we air near the early stages of a deflationary depression yes yes prices coming down now -- you take the stock market out of the whole picture of the economy.
Forget that the stock market is up.
What is really good last quarter GDP -- a negative number that.
All the economists totally yes we have Japan trying to re inflate -- economy that's why the Japanese yen is weakening so much with this new stimulus which they've been doing for twenty years and it hasn't worked.
And I'm looking at the net positions of the commercials -- -- the -- -- in the commit commitment of traders report from the Commodity Futures Trading Commission.
And at the highest net long position since march of 2012 which was the bottom in the bond market.
Pricing and then a big rally.
So and we and we look at the CRB index is there really flat to negative over the last twelve months where's the inflation.
And I think the economy's really chugging along at a very low rate right the government the the Federal Reserve -- as stop publishing the M three.
We look at you know web but don't catch up -- -- -- medical -- go -- -- Katie Katie.
You know we've been hearing this worry about inflation this contradictory worry about deflation.
What do you set.
Fire chief economist at -- -- partners is much more constructive on the economy.
Then Dan -- but I do think that we will see this CRB in this kind of measures of inflation.
Rally from here in fact I'm pretty bullish on commodity prices as well.
Looking beyond even energy prices but offset things like the base metals are industrial metals.
At -- things like that so I'm quite constructive on.
Indicators of the economy not just obviously the stock market was -- still does have that momentum again.
Well this I agree that the commodity prices have been inching up but the commercials have taken a high net short side but also want to point out that we had in January of 1973.
A megaphone pattern that from 1966 to 73 with the stock market made its final third attempt at a new high in January.
And proceeded to the down 50% into December of 1974.
I call that an inflationary period.
Yeah inflationary depression we're -- -- talk about it deflationary depression on the.
Rise and -- I probably -- million comment incredibly want he would have to wrap your fill in with this.
I want to bet with you we've made April 1 that's abuse at 14100 you said it would close lower I think higher it's at 15100.
-- the SMP close this year -- by the end of the year I'd say would be below 12100 below 12112.
O'clock Katie.
Where will the -- close this year.
I think we'll credit -- -- that keep that in 2007 highs above the 2007 I guess the number.
Above that 1575.
So another -- five points.
I think we're gonna talk about 16100 let's make about it and then got together with another it and thanks very much -- -- and Katie Stockton you're.
