Wednesday May 16, 2012
For our newer readers we exited the overall stock market in early February when our internal indicators topped out. We then wondered for the the next two months how the market could be staying up with so many stocks in decline. Now the overall market is playing catch up to the downside. But the internals are even worse, here look with me.
Bullish percent 150 day MA
We're half way there! About half the stocks are below their 150 day MAs, the low was 10% last fall.
But at the October low, the SPX was only 1075, today it is 1324!
NASD Summation Index
The NASD Summation index is more than half way there! In the last two years the SPX fell between 175 and 250 points.
SPX
200 points down from the top would mean 1225.It appears the SPX is already in a third wave decline, now playing catch up to the collapsing internals.
And racing to play catch up on the downside we have, JP Morgan
Note the huge volume spike on the announcement of the $2 B loss.Note the close under the 200 day MA.
It appears that we may get a big spike down in the actual price indexes to catch up with the crumbling internals of the market. That could be a final outright Greek default. The headlines have it wrong. Greece is not teetering, the holders of their debt are teetering. And after Greece, hello Spain!
And then there is crude oil. Here is how I reached the conclusion that oil is going below 90 and possibly to 82.
See the pink uptrend line, nothing too coplicated about this analysis. Right now this may well be the master market on what is going to happen.
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