Inflation/Deflation Watch

As of last week our Inflation/Deflation Moving Average was at -2 for the first time this year. It bounced back a bit on Monday to -1 but depending on how the week ends up could stay at the lower level. Unless we are wrong about this being a secular bear market, the recent rally in stocks is an age old bear market trick to suck as many people as possible into the den for the big kill. Despite all the evidence to the contrary, an increasing number of investors are feeling positive about the stock market. And of course as Richard Russell points out, we have to listen to the language of the market. But the language of the market is not all that positive, at least …