Notice that since the first taper in December that the stock market has stagnated and gone basically nowhere for the last 4 months. During that period inflation has begun to leak into the commodity markets. This is the same process that occurred as stocks topped in 2007/08.
We should see a mild deflationary period over the next 4-8 weeks and all assets should take a hit. But once that correction has run it's course stocks should continue the stagnation phase as the cyclical bull continues what I expect will be a multi-month topping process. As this progresses the inflation that has been stored in the stock market will leak faster and faster into the commodity markets during the second half of the year.
More in the weekend report.