Posted on 09/27/2014 9:01:51 AM PDT by Seizethecarp
First, the late Friday rally did manage to break the large-cap index back out above the downward sloping trading channel that has dominated the month, but only barely. Moreover, stocks quickly encountered heavy resistance at around 3PM at a shorter-term and much steeper downward sloping trading channel that has formed since the market peak on September 19. In short, it was a good bounce on Friday, but U.S. large-cap stocks still have a long way to go before they are even remotely in the clear to stage the next advance to new highs.
For the rest of the U.S. stock market outside of large caps, the situation remains highly disconcerting. Starting with U.S. mid-cap stocks (NYSEARCA:IJH) as measured by the S&P 400 Index, they did manage to hold support at the 200-day moving average at least for the moment. But when sticking with the wider September view as shown above for the S&P 500, the situation looks far more disconcerting. Following a fleeting breakout at the end of last week, U.S. mid caps quickly sliced lower through their previous downward sloping trading channel to strike new September lows by Thursday. And they are now battling resistance at what had previously been support on the bottom of the previous trading channel. In other words, the short-term trend in mid-cap stocks is both definitively and increasingly down.
But what about the rest of the world? Were any of the recent challenges alleviated by the late day strength on Friday? Not at all. In fact, developed international stocks as measured by the MSCI EAFE Index (NYSEARCA:EFA) continue to struggle to reclaim the previous downward sloping trading channel. Hardly a bullish condition at the moment.
(Excerpt) Read more at seekingalpha.com ...
Sorry about that...
They all point down or roll over!
It is free to subscribe to get this, BTW and well worth it, IMO. He is great!
For those too simple to recognize satire.
“...while Lou Dobbs last night was telling Bill O’Reilly not to worry and to stay fully invested! We’ll see how that works out.”
::::::::::
Yeah, just wait until Obama is gone, and money is not being printed for Wall Street banks to mask a constantly declining economy....
The monetary policy is not something that 0 is in charge of. That cabal was in place before 0 and will continue to be after 0 has to vacate.
I’m waiting for some one to come out a say the truth, this market is being manipulated, I am but a casual observer with no stock in this market, but I can see it, maybe that’s why I can see it.
I can use one market indicator as an example, several years ago when bad news hit the market it went down, good news it went up, just this one indicator has been that way for many years, now they are upside down, bad news drives the market up, good news, it might go up albeit less than bad news.
I’m sure sophisticated market watchers and investors will disagree with my assessment of market manipulation, so I cannot argue with them, because I can’t identify the who, what, where, when, how, but I think I might know why...
I wouldn’t go as far as saying the markets are manipulated.
But would agree that when you apply historically accepted models for valuation, things haven’t made sense for quite some time.
The world is awash in dollars.
There are fewer and fewer places for this massive amount of cash to invest in. They can only buy soo many Government bonds, corporate bonds, mortgage backed securities etc.
There is soo much money available to them that they must move along and out the risk curve to sustain the returns they have been accustomed with.
There is a huge difference between buying certain assets because they “Want to” and buying them because they “Need to”. They need to buy those assets because they have no other choice.
The world’s central bankers, except the EU, have been printing money furiously for the past 6 years, which has ended in disasterous Real Estate bubbles in the US, China and Japan and the markets had been counting on the EU to start printing money soon, but the Germans remember the 1930’s and the Russian’s are pushing the EU into a recession by retaliation against the sanctions for their Ukraine invasion and Crimea annexation.
EU’s potential business borrowers are showing little appetite for borrowing any money from banks so there is no mechanism to transmit Keynesian stimulus to the economy!
Keynesian model fails again, as usual...surprise, surprise!
Must watch for those that haven’t seen this.
Fight of the Century - Keynes vs. Hayek - Round Two
https://www.youtube.com/watch?v=LA1-1DlhuXU
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