EVIDENCE IS MOUNTING

You might ask yourself, self is it true that what goes up must come down?

IMHO there is mounting evidence that the bull market that began some 50 months ago is an accident waiting to happen, a DOA, a flesh eating wound, a bear trap.

Strap this one for size.

The weakest sectors of economy are consumer, financials, and industrials. A SELECT GROUP of LARGE CAP DOW Stocks are pushing the index higher just as the larger group of stocks get sicker and sicker.

Health of a rally is usually shown in NUMBER of stocks ADVANCING VS DECLINING, currently the advance decline line of stocks PEAKED back in JUNE!!! According to market research when this happens usually for 4-6 months from this peak is when a significant market top can appear, that time frame begins NEXT WEEK!

Higher highs just as buying enthusiasm is heading north a rather peculiar phenom.

WHO, of sound mind is going to argue that HOUSING did not lead this economy OUT of the BEAR doldrums back in 2002-2003?????

Recent report says existing homes for sale increased to 4,581,000 (weldon's money monitor), what is astonishing is that is a 1M increase just from March!

And this total is DOUBLE what it was in 2005.

And this total is a RECORD.

And so is the avg time it takes to sell a home 10 MONTHS. in Jan it was 6.6 (source weldon)

WE are seeing the emergence of home price DEFLATION (no wonder FED is trying to INFLATE??? and has abandoned any support for the US $$)

NEW HOMES inventory up to 8.2 months!!!!!!!

Can we agree this points to a REVERSAL in consumer credit fueled by rising housing values and fueled by cash outs that went directly into consumption?

Would this NOT also point to probability that the SECULAR (long term) credit BOOM has POPPED?

(again from Weldon) Consumer loans outstand fell to $780B down by around $10B in one week. Weldon explains this equals a 67% Yr/Yr contraction.

Consumer Sentiment surveys are PLUNGING.

The US $$$ is in uncharted territory, it broke the previous monthly lows set back in 1992. A WEAK DOLLAR could put pressure on interest rates, even after the FED Lowered rates last meeting, longer term yields have RISEN!!

A falling dollar has fueled golds rise, OIL near records, anything denominated in dollars should rise like any imports??

Local governments like Maryland's are preparing a $2 B tax increase!!

We have seen a HISTORIC BULL RUN, longest in history! It has been fueled in part by an ever expanding credit and debt feast, this appears threatened if not OVER!

AT VERY LEAST, credit is NOT as easy to obtain as it once was, Banks are cautious, how can this be good for economy?

BUST is usually EQUAL TO OR GREATER than preceding BOOM, so I am worried the BOOM is done.

The effects of housing and its course to be run will take MUCH longer than when stock bubble popped, the stock market is VERY liquid, but not so for housing.

A delay of inevitable is being attempted, we already know that when gov and Fed meddles the results can be disastrous down the road......and I think we are at that forked tongue in the road.....choice PAIN A or PAIN B.

I am IN CASH WAITING FOR MUCH BETTER VALUES. we already know I am unltra conservative and do not like to hold debt....

Duratek