March 10 investment market update
For people who are interested in what works in forecasting markets and for profitable investing- which I am quite clear is not everyone- I present the below information and analysis. First, unless you are specifically interested in noticing what is present and adjusting to it, please stop reading now. Again, if you wish to invest your attention in who is to blame for your prior results (or future results, etc) or how to fix reality to make your prior investing strategies work well again, you will not find that here. This is simply a brief review of what is so, and, by the way, it may scare you, depending on your current strategies, so if you are ashamed of the possibility of experiencing fear, again, please stop reading now.
Here is a summary of the data: prices of several major markets have been dropping sharply and have recently broke an important barrier (as forecast in my article Mid-January Trendlines: http://jrfibonacci.wordpress.com/mid-january-trendlines/ ). When I say that prices broke a barrier, what that means is that buying behavior and selling behavior have already begun a phase that I have predicting since early 2003 which I call capitulation, also known as an accelerating crash or avalanche-like collapse.
To continue with the avalanche analogy, it is like I am an experienced skier, though and you may be a novice on the slopes. I am clear that there has been increasing danger or several years. A major slide happened in recent years, as forecast by myself and many others, but that slide still surprised many novice skiers, causing many of them severe injury. In 2009, many of them recovered a bit from their injuries and are now more eager than ever. You were probably hurt somewhat in 2008 and recovered partially in 2009. You also may know very many people who were as well.
However, though the snow may have been great for skiing for a while, the underlying instability of the slopes remains. In fact, from my perspective, I can already see the initial sliding of the snow and ice at the top of the mountain- for that is where I have been monitoring snow conditions carefully. Most of you reading this are novice skiers on the slopes in the path of the emerging avalanche. You may have never witnessed or experienced the kinds of injuries that I may have witnessed and experienced. You may still be quite eager and confident in the stability of the snow. So, if you dare, come with me and look at what is clearly happening from the view at the top.
These are the last 5 years of prices for the Housing sector of the US Stock Market (HGX). I have been focusing so much on this sector in my research since 2002 because the housing sector is so sensitive to global lending markets, which are on the verge of a seizure.
Here is the chart again, emphasizing now that the rising trend of 2009 has already been breached and markets are now “floating” under that trendline, with the slightest upset liable to send current owners in to a selling panic.
Next, here is a chart of the price in US Dollars of a bundle of major commodities (including the one commodity that I have been focusing on so much since 2004: oil). This chart covers the last two years. Notice again that, as in the US housing sector, the minor rebound trend of 2009 has already been breached (as of mid-January 2010).
Next, here is a currency price chart (foreign exchange rate) for the US Dollar and the British Pound. Notice that while the 2007-2009 slide was virtually the same as in US stocks or global commodities prices, the minor rebound of 2009 ended in August for this market.
Now, here is a chart of 30 major stocks in the US stock market, an index known as the Dow Jones Industrial Average. Again, this chart is for the last two years.
Let’s take a closer look at the recent activity in that famous US stock market index. See if you can identify another trend in the following 7 month chart.
Here is the line I see when I look at it, which is similar to the line in the first chart (of the housing sector of the US stock market).
I’m not going to repeat what I’ve been writing for the last 7 years: why it was so easily predictable that markets would do what they have done in recent years and while the minor rebound of the exhaustion rally of 2009 appears over across all markets (yes, even gold) and where it is likely to stop. I am going to dare you to copy and paste the link below in to your browser’s address field, showing the price of the Japanese stock market (the Nikkei 225) for the last 21 years. (By the way, if you’d like my assistance in either reducing your risk or accessing the unprecedented opportunity available in the next stage of transition, reply to this blog with instructions for contacting you.)
- When Will This Gas Price Chart Finally Reverse Itself? (businessinsider.com)
- Why the stock market can be more profitable than ‘cash’ (blogs.confused.com)
- CHART OF THE DAY: All Of The Stock Market Sentiment Indicators Combined Into One Index (businessinsider.com)
- InvestProfits.com Announces Free Investing Blog for Self-Investors. (prweb.com)
- Learn the Right Tools for Stock Market Success – by Greg Jensen (optionsanimal.com)
- Updating Stock Market Rallies Since 1900 (ritholtz.com)
- CHART: The Roubini Stock Market Indicator (businessinsider.com)
- Here’s The Chart That Has Stock Market Bears Ripping Their Hair Out (businessinsider.com)
- Commodities on the ‘Edge of Gory’ (marketwatch.com)