*click on chart to enlarge*
Action now taking place below the 20WK moving average, and instead of a rising 20 month(80wk) and 40 month as in previous "secular" bull, we see the 80WK turning over both flattening. And IMHO this is an early warning signal.
Please notice how the MACD (momentum indicator) since 2004 top has registered lowered tops. This is BEARISH action my friends, DO NOT ignore this.
For those who read Richard Russell, this Friday he mentioned how the GOV was trying to "inflate debt away". Other option or potential is to have debt DEFAULTED away with massive bankruptcies. Some of the marginal lenders are going to get crushed, I notice aggresive lender COF has turned down just recently.
FNM stock has been decimated. And there is NO stock leadership to the upside. Isn't a test of WK (under 10K) coming?
I don't think y0u can "inflate" debt away, what happens is that pressure of "inflation" DRIVES UP LONG TERM INTEREST RATES and that doesn't inflate them away, those on adj mortgages etc would be put under severed pressure with savings not available.
You saw how savings DROPPED a HUGE $20B last week? WOW
If consumers have lost faith in crack smoking BUSH, and his henchmen Haliburton no bid DICK, cundaleza Race, with squinty eyed bastard holding up the rear, and consumer sentiment drops like a stone, faith in Gov rocked, faith in economy rocked, isn't the stock market going to play CATCH UP to those sentiments?
Near 300 WEEKS ofcontinuous bullish sentiment plurality only sperated by a brief bearish 9 week total plurality, my goodness folks last bear mkt bottomed with 40 STRAIGHT WEEKS of bearish plurality (IIAA POLL), there is a HEAP of bullishness to feed on and IMHO secures this to be a SECULAR BEAR MARKET of historic nature. BRINGING tons of pain for those ill prepared.
WATCH interest rates, could be key! FOllowed in next post is another chart no one is looking at but you and me! and its....free.
D
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