I know I had many loyal readers, and I am sorry I have not been able to keep up with this blog, I enjoyed writing regularly for many years. But my business I started 4 years ago is thriving and needs most of my attention.
There are many troubling technical reasons to be concerned with the current state of the stock market.
I won't bore you with exact details, but there is so much underlying weakness in stocks BEHIND the large cap leaders to be alarming. More and more stocks are falling into their own bear markets as the major indexes were reaching new highs, that pattern has only gotten much more pervasive and worse.
They like to say you have just a few generals leading, but your army has run off leaving you to fend for yourself. Sector after sector has fallen into their own bear market....and its reaching a point on no return for the major indexes.
There is no way stock valuations make any sense with the profit expectations going forward. QE and all the tricks like ZIRP has helped only the stock market, but not the real economy maybe limping along at a 1.5- 2.0 GDP
The Transport index made its highs last November, that was 8 months ago!
Commodities are in a bear market, what's with OIL at $40???? When economies are HUMMING, so are commodities...if indeed we are consuming them to make things, build things....we need energy...something is wrong.
China.....as reported this AM on the financial channel a respected analyst Chanos stated " it's much worse than you think".....its major FUBB over their....major....and its just beginning as the govt attempts to buy stocks , whatever it takes has hastened the loss of faith.....there is NO such thing as free markets, the more THEY manipulate, the worse the repercussions
APPLE has fallen down...actually began 2 weeks ago.
Oil in a free fall USO
VIX, fear index has spiked, worth watching to see if it has broken out of long downtrend. Higher VIX means LOWER stocks.
ZIRP policy has to end sometime, now with stock weakness will the FED even raise .25% this year?
The current policy is already 5 years into CRISIS LEVELS......did we never leave the crisis?
Markets in BULL mode DO correct, so we don't have to jump to conclusions.....that said, the majority of stocks already in downtrends is not what you see in a healthy bull market.