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I can best summarize my answer as rotting economic fundamentals in this
country combined with progressively more egregious tweaking of government
economic reports. That's a broad statement, however the litany is well
known:
-
Consumer spending funded my the
housing rather than strong personal income and job growth. Current signs
suggest a slowing housing market.
-
Poor job growth, with the bulk of new jobs in
lower wage sectors such as retail and health care
-
A budget deficit which continues to spiral out
of control and that does not even include accruals for social security and
other entitlement programs which run the true annual deficit into the
trillions.
-
A trade deficit which continues to spiral out
of control because we continue to consume so much more than we
produce
-
A national savings rate which is too low to
support the twin deficits putting us in the position where we must rely upon
foreigners to finance both with huge sums of money
-
Hollowing out of our manufacturing employment
and professional through the transfer of jobs to Asia coupled with hollowing
out of our research capabilities through transfer of technology to
Asia.
-
Reliance upon the dubious premise that the
world's new manufacturing powers will always need Americans to do their
research and marketing for them.
-
Tweaking of government economic reports
including:
-
Understatement of unemployment by removing
"discouraged" workers and others from the unemployed. True unemployment is
currently estimated at 9-12%.
-
Understatement of inflation through hedonic
adjustments and substitution adjustments. True inflation is currently
estimated at 6-8%.
-
Overstatement of GDP
by understating inflation.
-
Understatement of deficits by excluding
future costs of entitlement programs such as Social Security, Medicare,
etc.
Technically, my "mkt outlook" post of
2/28 pretty much says it all:
Because this market has been toping since
August 2004 when a terminal rising wedge started on the weekly charts. Because
there have been more terminal daily and hourly rising wedges than I can count
and each one has broken south only to recover to the highs, then stagger
back. This market has been topping for so long that the bears have given up.
The bulls have been in control of price forever but the bears took control of
time many months ago. It has required patience and a quick covering finger to
be a bear in this market the handwriting is on the wall.
Maybe they can rally it again, maybe not
but time says this turkey is ready for dinner. See attached monthly SPX ...
the first warning was when price broke right from the right hand cyan
line which is the complement to the one on the left.
Then recall the 3 day inside day
pattern which broke to the upside, then collapsed today into what may turn
into an outside weekly reversal ... depends upon the
close.
See also attached breadth models showing
clear divergences in issues and volume.
Earl
----- Original Message -----
Sent: Saturday, March 04, 2006 8:42
AM
Subject: Re: [RT] mkt outlook
Why do so many people on RT think we are due for a long
term down turn? I
know it has to
be at least one technical reason
but what fundamental reason is there to
believe that? The
blue
chips have an average PE of 15 .. earnings are still growing at a
healthy
rate and we
have little inflation. The country is fully employed and
oil has at least
stabilized. Do we put
our money on some chart
marks or bollinger bands or elliot waves or on
facts? My take
on
the equity markets are that they will continue to climb hesitantly up
the
"wall of worry" with
slips and stumbles along the way but belief in
a long term down trend will
have to show up
on my "facts of the
economy" list before I can join that camp.
Bob
At 08:22
AM 3/4/2006 -0500, you wrote:
> You are correct. Lets at
least wait untill he is proven wrong or right,
>before we make comments
on it. If we don't make a new high over the next
>few weeks.
He is correct. If we do make new highs. He is
wrong.
>My vote is for new highs after this probably very small
correction.
> I will say that he worded it a little supicous, but
it may have need a
>mistake.
> When someone says the top is
in but gives no time frame it does make it
>seem like there is no way
for them to be wrong.
> Does he mean the top for this week?
The top for this month?
> Or as it seems that he said. The
top is in. Meaning the bull is over with
>a bear for
years.
> Hard to know and understand when someone makes
quick statements with no
>explainations.
> But overall Ben
seems to be a good guy and helps a lot with his posts.
>
>-----
Original Message -----
>From: "Dan Harels"
<harelsdb@xxxxxxxxxxx>
>To:
<realtraders@xxxxxxxxxxxxxxx>
>Sent: Saturday, March 04, 2006 1:19
AM
>Subject: Re: [RT] mkt outlook
>
>
> >
Bob,
> >
> > There are many bright people on this forum and
ridicule, no matter how
> > subtle or "clever", does not encourage
dialog.
> >
> > Dan
> >
> >
>
>>From: "Bob" <BHEISLER@xxxxxxxxx>
> >>Reply-To:
realtraders@xxxxxxxxxxxxxxx
> >>To:
<realtraders@xxxxxxxxxxxxxxx>
> >>Subject: Re: [RT] mkt
outlook
> >>Date: Fri, 3 Mar 2006 18:38:18 -0600
>
>>
> >>How could it have been wrong?
>
>> ----- Original Message -----
> >>
From: Ron Cernokus
> >> To:
realtraders@xxxxxxxxxxxxxxx
> >> Sent: Friday, March
03, 2006 4:53 PM
> >> Subject: Re: [RT] mkt
outlook
> >>
> >>
> >> Here is
Ben's call from last Tuesday.
> >>
> >>
S
> >>
> >>
> >>
volume still points to 1300-1310 on sp500,
>
>> that should be accomplished in 2-4
days,
> >> if not ,all bets are off ,and
the top is in,
> >> Ben
>
>>
> >>
> >> SPONSORED LINKS
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> >>
>
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> >>
>
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subject to the Yahoo! Terms of
> >>Service.
>
>>
> >>
>
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> >>
> >
> >
>
>
> >
> >
> >
> > Yahoo! Groups
Links
> >
> >
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> >
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