Sometimes you're the bug, sometimes the windshield

A Bear sighting? When we get a 20% decline from the highs, that would give us 1775.20 as our first target, not far from 1750 2004 low.

IMHO, a breakdown from there would lead us back to the 2003 lows.
RSI is weekly overbought to neutral and MACD just giving sell signal.


Notice how from 2004 high the MACD has registered weaker peaks.

Greenspan's comments are rather curious no? Targeting housing bubble no? The shift into housing assets from stocks after 2003 lows is nothing short of amazing. The loss of this engine from economy would be nothing short of devestating, and it's coming.

Short term interest rates appear to have bottomed, hitting 4.15% retrace area we talked about, so expect a potential rise before the next decline. It may be the next decline is going to signal trouble for economy ahead.

Everybody is in the housing boat, and the iceburg somewhere dead ahead. Only subtle hints remain visable to those of us looking. Is there another bullish high awaiting for this sector? Will we end up with higher than 70% home ownership record? Can prices keep rising and rising as they have? Can we find more sub prime borrowers to ensnare?

You have the reasons for Greenspan's "unusual" remarks Friday (posted here) and yet, the market volume was weak (4th SLOWEST this year) and the VIX fear index didn't budge.

When the DOOR begins to close, there will be no room for fatty's to get through, no room for hardly anyone.

I don't want to see it my friends! But I must talk about the possibilities. I am not a party pooper or doom and gloomer, I want to alert you to what MAY come, so you can prepare and come out the other side better or no worse than you are now.

The market has gone nowhere for a year and a half, as each sector is spent, there is nothing available to drag it all forward IMHO. MAINLY because the fuel for the engine is SPENT! If you BOOM then you BUST, this is the cycle the FED seems to like and has created.

What be the signs? The markets will tell us. Breaking ABOVE or BELOW our current year plus trading range. A SHARP rise or fall in interest rates.A sharp rise in unemployment figures. a total breakdown in housing and banking index (which we will watch). A 20% DROP in the indexes from their highs (classic Bear Market signal)

Phase ONE of bear complete, cyclical Bull seems complete of almost 3 years! It is what has seperated us from Phase 2 of the Secular Bear (it would make sense that a secular bear would follow a secular bull).

What strikes me in the face is a near record string of IIAA bullish plurality of 140 weeks PLUS which covers part of the bear market, even though NO NEW HIGH has been registered in main indexes INDU SPX and NAZ.

Silver, an industrial commodity has broken below its uptrend channel, who mentions this? DO the gold bugs mention SIlver bad performance VS Gold? or that Gold has not even bettered its 2005 high yet? Maybe it does, but it hasn't and SIlver doesn't look like it would confirm that move anyway.

WHY wouldn't the metals be reflecting the INFLATION we know about? The one the BLS hides? Doesn't record petroleum bleed into every orifice of our economy as everything needs to be trucked to destination?

Fuel surcharges of 15% or more are common, it either leads to higher prices or lower profits, that and credit spread should put a capper on SX profits, and I feel going forward estimates are WAY too high, and dissapointment is dead ahead.

And we would have reached the point the obvious is obvious, and the selling will be a blood feast. We are ILL prepared for this given record LOW amounts of CASH held by Mutual Funds.

We NEVER had mass redemptions during Phase ONE of the Bear, should we get serious selling, stocks must be sold to pay redeemers.

LOTS of money has flowed into Hedge Funds some 8,000 of them, money from Institutions, and Private retirement accounts, BECUASE, Money Markets have outperformed stocks in 2005!!!! The payouts cannot be handled with current 0% or worse returns, so they figure Hedgies will do it....very risky IMHO

Even though penny stocks are pennies again, so $$$$ volume is very weak, the SHARE volume is more than doubled from its bubble 2000 peak!

Do you see now WHAT could happen in Phase II of bear? When we know for sure Hibernation is over, what kind of havoc might ensue? Because the memory of 2000-2003 will return, now it is distant forgotten memory, the VIX will again be spiking towards 40 or more rising up from recent single digits!

Record SPX/VIX ratio was hit this year, even though no new highs in Dow or SPX. The new reading was near 30% ABOVE bubble high, can you hear me now.

A rising ratio is NOT bearish in itself, as we have seen as it hit new highs of complacency, but it is when a high is IN, and then a decided decline begins and takes hold is when we get signal to be wary.

Also, as I commented many X, record credit/debt expansion is not immortal.

I am going to conclude here so I can post my last weekend chart seperate from these opinions.

Duratek