U.S. stock market on verge of collapse?

[Uncle Festivus]

I am just wondering how much the feds action will distort markets and how useful some of the old market indicators will be as a result.....still a chart is a chart.

They can't distort intrinsic demand - the transports are telling us that demand is falling - the next phase down has started already?

"The market" hasn't priced this in yet?

Transports down 2.8% today.....

 

[Porper]

A bit of divergence here - one index is way ahead of itself?

Dow = green, transports = white

View attachment 49027

View attachment 49028

Everybody and their dogs are watching the non confirmation of the Industrials and Transports. It is headline news around the world which makes me suspicious in regard to the expected sell-off. Remember, the herd is usually wrong. U.S indices in general are looking strong and the XJO is posturing for an attempt at overcoming resistance...time will tell whether the attempt will be successful. I know what I think.

Perhaps the DOW is ahead of itself, but maybe the Transports will play catch up?

 

[CanOz]

Everybody and their dogs are watching the non confirmation of the Industrials and Transports. It is headline news around the world which makes me suspicious in regard to the expected sell-off. Remember, the herd is usually wrong. U.S indices in general are looking strong and the XJO is posturing for an attempt at overcoming resistance...time will tell whether the attempt will be successful. I know what I think.

Perhaps the DOW is ahead of itself, but maybe the Transports will play catch up?

Another great reason why trend following or other algorithmic systems can beat the market time and time again.....they don't try and perceive.

I enjoy the interpretation of indicators as much as the next person, but I don't bet on them.

CanOz

 

[Porper]

Another great reason why trend following or other algorithmic systems can beat the market time and time again.....they don't try and perceive.

I enjoy the interpretation of indicators as much as the next person, but I don't bet on them.

CanOz

Mechanical systems with a positive expectancy have a big advantage in many areas...removing emotion being the no.1 i.m.o.

However they aren't for everybody and a discretionary system can be just as profitable, arguably more so in a bull market. Obviously that isn't the case for our market at the moment. I personally trade both.

 

[CanOz]

Mechanical systems with a positive expectancy have a big advantage in many areas...removing emotion being the no.1 i.m.o.

However they aren't for everybody and a discretionary system can be just as profitable, arguably more so in a bull market. Obviously that isn't the case for our market at the moment. I personally trade both.

Yeah me too, when I'm trading lol!

I need to train someone to take the flipper trades for me, my wife is not interested yet....I'm stuck out in the middle of nowhere with little Internet access.

Anyway, the markets will always be there.

CanOz

 

[Joules MM1]

How Fast Are U.S Economic Fundamentals Fading?

We don’t know the how or when, and expect the powers that be try to keep the tape elevated through the election, but the charts below suggest there is risk of a seismic downtick lurking in the equity markets.

“Stunning divergence in TRAN relative strength (daily and weekly) now greater than before the top in 2007″ – Beachcomber

http://bikinianalytics.com/wordpress1/2012/09/20/how-fast-are-u-s-economic-fundamentals-fading/

 

[Uncle Festivus]

Everybody and their dogs are watching the non confirmation of the Industrials and Transports. It is headline news around the world which makes me suspicious in regard to the expected sell-off. Remember, the herd is usually wrong. U.S indices in general are looking strong and the XJO is posturing for an attempt at overcoming resistance...time will tell whether the attempt will be successful. I know what I think.

Perhaps the DOW is ahead of itself, but maybe the Transports will play catch up?

Must have missed those headlines

I agree, the herd is usually wrong, so apart from the omnipresent Bernanke FED/Treasury backstop for the DOW there is little fundamental reason for the level it's at, apart from a perceived future 'recovery' actually materialising.

The difference for the TRAN is it gives a more reflective feedback for what is actually happening in the real economy - ie whether or not various policies are working & the trickle down liquidity is getting through.

As can be seen by the 'hard' data from Fed-Ex and Norfolk Southern Corp, and is reflected in the TRAN, there is a negative trend for transporting 'stuff' around the country.

There is probably one last hurrah for equities - if the Dems & GOP agree to postpone the fiscal cliff. Put it off for someone else to deal with down the track? In the meantime put a dress on it and apply some lippy.....

It's getting ugly and going to get uglier - market optimists will be disappointed.....realists won't be surprised at all.

 

[Porper]

It's getting ugly and going to get uglier - market optimists will be disappointed.....realists won't be surprised at all.

Yes but who are the realists?

Those that think armageddon is around the corner and are confident this time "will be different" or those that subscribe to history which shows us clearly that the world financial system has and always will survive and prosper?

So the choice is...collect your cans of spam and get ready for the turmoil that is supposedly inevitable or get on with life, be happy and do your bit for the human race. Tough decision!!

 

[namrog]

Wouldn't those charts be distorted anyway by the fact that the worth of companies within the Dow being measured in US dollars, has more to do with a dollar that's loosing value due to all the QE, than the intrinsic value of the companies themselves within the Dow..

I guess what I'm trying to say is how would the dow chart compare to other indices when measured in say something like gold ounces.

Just a thought, & maybe way off track...!

 

[Joules MM1]

I guess what I'm trying to say is how would the dow chart compare to other indices when measured in say something like gold ounces.

try this:

https://twitter.com/JamesGRickards/status/246385759932780544/photo/1

there's a truck-load on the interweb

...this ones prob aprop for this thread:

http://www.elliottwave.com/freeupdates/archives/2012/02/27/Stock-Market-Bull-Real-or-Phony.aspx

 

[explod]

Wouldn't those charts be distorted anyway by the fact that the worth of companies within the Dow being measured in US dollars, has more to do with a dollar that's loosing value due to all the QE, than the intrinsic value of the companies themselves within the Dow..

I guess what I'm trying to say is how would the dow chart compare to other indices when measured in say something like gold ounces.

Just a thought, & maybe way off track...!

Yes a good point. Another is that companies that go belly up are no longer in the index which corrects to the upside by taking away the downside. A bit like the banks assessing debt an asset.

 

[Uncle Festivus]

Yes but who are the realists?

Those that think armageddon is around the corner and are confident this time "will be different" or those that subscribe to history which shows us clearly that the world financial system has and always will survive and prosper?

So the choice is...collect your cans of spam and get ready for the turmoil that is supposedly inevitable or get on with life, be happy and do your bit for the human race. Tough decision!!

Realists are those who can do basic maths and can see, for countries like Japan, UK, US, Spain, etc etc, that expenses are greater than income and rely on 'loans' to fill the gap. When even that is insufficient their central banks resort to printing new money ie QE etc

"history which shows us clearly that the world financial system has and always will survive and prosper?"

Well that's just it - financial systems over the ages have not survived, they all eventually fail.

It's looking like the peak for this current 'system' was back in 2000 or so, as per below......

Talking about 'this time being different', have a read of this -

http://www.economics.harvard.edu/files/faculty/51_This_Time_Is_Different.pdf

It would actually be abnormal for the current global financial system in it's current state of malaise to survive against the odds of history........

namrog - the illusion of 'wealth"?

 

[Uncle Festivus]

Looking a bit shaky here??

 

[Porper]

Looking a bit shaky here??

View attachment 49278

Could be a retracement of short duration but would hardly call it shaky??????????????

A 31.0% advance since October 2011 is bullish whichever way you look at it. Nearing all-time highs...need I go on?

The market doesn't appear to think the end is nigh like some. And yes we've all seen the bearish charts measured in Gold and know it's all false hope and a ticking time bomb...blah blah blah. The fact is markets are heading higher so why try and fight it? One negative session doesn't reverse the trend. Get a week or two of the same and then we'll be talking deeper correction.

 

[Uncle Festivus]

The fact is markets are heading higher........

It is a fact? Why?

The Dow hasn't gone anywhere since QE3 was confirmed 3 weeks ago. So that's what $3Billion a day buys - a flatline Dow?

 

[CanOz]

It is a fact? Why?

The Dow hasn't gone anywhere since QE3 was confirmed 3 weeks ago. So that's what $3Billion a day buys - a flatline Dow?

We are due for a pullback, both technically and seasonally. This is still a pretty strong trend though and a bit early to call a top IMO.

Agree Porper...

CanOz

 

[notting]

Reporting season and an election in the US over the next month.
Doubt too many are going to be throwing the bucket in right now.
After that companies should be in the clear! :car:

 

[Joules MM1]

Reporting season and an election in the US over the next month.
Doubt too many are going to be throwing the bucket in right now.
After that companies should be in the clear! :car:

of course, he could simply ask; are they all waiting for the election to pass?

sittin' onna lo' o' company dosh guvna

http://www.zerohedge.com/news/2012-...nesses-quietly-preparing-financial-apocalypse

always with the apocalypso theme

 

[Joules MM1]

here's an interesting imf point of view

Fiscal policy
Let go of the brakes

Oct 9th 2012, 6:01 by R.D. | TOKYO

http://www.economist.com/blogs/free...al-policy?fsrc=scn/tw_ec/let_go_of_the_brakes

new zealand took a hit.....and looking forward, not so bad...

 

[Porper]

It is a fact? Why?

The Dow hasn't gone anywhere since QE3 was confirmed 3 weeks ago. So that's what $3Billion a day buys - a flatline Dow?

Just goes to show that QE3 was expected and added nothing to an already bullish stockmarket. The same will probably happen when QE4 is announced although markets will probably be at substantially higher levels by then