*click to enlarge reminded
*(John MAck CEO GS on CNBC....."loan demand is down DRAMATICALLY" when questioned if banks are NOt lending)
MACD crossed up in MArch a BUY SIGNAL (GOOD ONE!) but now see downward red/blue arrows....MACD has crossed down and the blue histograms have gone below 0.
Also I drew 3 FAN LINES from the MArch lows, all violated. I also drew DOWNTREND LINE from the highs back in 2007 and price stopped there. with a TEST (red candle) in place.
We are also sitting on the 20 WEEK MOVING AVG (exponential) which we haven't been below since July correction.
If the 20 WEEK SHOULD flatten and then turn down (doesn't happen over night) then another nail would be hammered in the bull case.
Higher highs could come, anything is possible, but this weekly chart leaves room for other outcomes, at least in near term.
The deleveraging continues, bank lending and loan demand CONTINUE to DECLINE so the GOV has stepped in to spend and unfortunately what do they do a good job at?
Say what they might, small biz barely has pulse, little job creation, almost ALL the efforts went to saving the BAD BANKS, TRILLIONS of bullets been spent with little to show.
AS the need to fund the ever increasing debt grows, the chances of an interest rate bond accident does too.
AS rates fall it usually stimulative to economy, but we are at near record LOWS, but RECORD HIGHS in debt issuance....and NO secondary market without 100% FED guarantee.
EVERY MAJOR BEAR MARKET ENDED with stocks at never before seen levels, dividend yields at 6% or better (now only 1.95% !!!!! on SPX) and the stock market shunned like scarlet letter.....so too will this one
2 comments:
There is also a gap from 9/4/09 within a few points near the 200 day on the dailys in the SP in the 1013-1019 area, That is probably where the market is likely to test. That gap occured on the holiday weekend and never looked back. The breach of the 1080 level if we can continue to extend lower this afternoon, brings that Key reference point into focus as a nice lower key swing point if your short from the 1150's or the breach of 1120 or 1080. If your short in the 1080 area, or the days high today, you would only have to risk above the high of the globex last night at 1103 with the 1015 area as a target, a nice 70 or 80 point move with a 10-20 point risk. Not a bad trade if you have the patience to wait, and are active enough to risk 500-1000 per contract with the 10-20 point stop. My trading time frame is shorter, but the key references points are still the same.
Ohh yes! We have topped big time. Dollar is on the rise. Commodities are on the fall. Seems like 2008 again. Crash 2.0?
Being an election year I am sure they will panic and throw more money at the problem with another "stimulus". That might keep the markets afloat until Nov maybe then ....
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