Remember, I told you that I have no catalyst to recommend buying other than for the highest growth stocks (deep in the money calls) in a scale fashion where we have only committed ¼ of a position until we decline another percent from the lows, and for utilities and high-yielding companies that can pay that dividend. (Can CenturyLink (CTL) pay it? I'm not sure now.)
We need a cavalry moment to change the tide, though. We need something that is more positive than the current landscape. We need a break in something -- more jobs created, or lower inflation. Lower inflation allows central banks in emerging markets to stop tightening. Or at least wait long.
And lower inflation means more purchasing power and less hunkering down for those who have jobs.
The linchpin of this inflationary bout is oil. You hear it endlessly. All of the conference calls that have been mindful of inflation just say it point plank: petroleum and petroleum products.
That's why I am watching oil like a hawk. Remember when the strategic petroleum reserves of the world were opened? Remember what happened? We went down to right about here and then boomeranged higher. The consensus was that we had failed to stem the upward trajectory.
Right now, we are testing that consensus. If we can take out $90 a barrel, then we have a real reason to like retail and restaurants -- an important cohort that bottomed first in 2008, although the swings in oil then were unfathomable.
Consumer confidence was crushed by President Obama and Congress. The idea of gaining any consumer confidence is ludicrous. Unless oil keeps coming down.
The implications of a price break in oil are deep and oh so positive. They can cause a snap-back rally, like the one you are seeing.
We are committing capital in Action Alerts PLUS in part because of this price break. But we aren't aggressive.
As I said on TV, it's really tempting for scalpers, and I see people taking it because gold's come off and oil's down.
But for investors, it's too soon to buy more unless it fits the high multiple or high dividend list.