Come on! How many times are they going to discount these earningswhich were the so called excuse for market rise many months ago despitethe nation-bankrupting cost of same? Great opportunity to sell / takeprofits since much worse, also called reality beyond the b*** s***, to come.Then there’s also the bad but typical news; viz., deficits, trade and budget,up.‘This is a global depression. This is a secular bear market in a globaldepression. The past up move was a manipulated bull (s***) cycle in asecular bear market. This has been a typically manipulated bubble as haspreceded the prior crashes with great regularity that the wall street fraudsand insiders commission and sell into. This is a typical wall street churnand earn pass the hot potato scam / fraud as in prior crashes.’
Gomes: ‘Having been a technical analyst for thefirst 10 years of my investing career and a fundamental analyst for the past 15 years, I'm abeliever that technical patterns form as fundamentals unfold. As such, if you know somethingabout both, you can confirm both against each other. At this point in time, I see a market that istechnically reaching up toward its 200 day moving average (2,250 for the NASDAQ). I also see a50 day moving average that is threatening to drop below that 200 day moving average.Technically, that is usually a very bad sign for the market. The question is, "will the 50DMA dropbelow the 200DMA?" I think the answer is inevitably "yes". The thing about the moving averages,is that you can see which points of data are about to fall off. Meanwhile, you can makereasonable assumptions regarding the points of data that will take their place. By doing so, youcan construct a range of probabilistic scenarios. In this case, some high numbers are about tocome out of the 50DMA, making it go lower. Meanwhile, some low numbers are about to comeout of the 200DMA, making it go higher. Since both are VERY close to each other right now, it'ssafe to assume that the 50DMA will indeed fall below the 200DMA. So, that's probably bad newsfor the market...technically. Fundamentally, it appears that Q2 turned out well for mostcompanies. However, most of the investing world knows this and stocks have rallied about 8% onthe news. Ever hear the saying "buy the rumor, sell the news"? Well, the rumor has been boughtand the news is just starting to flow in. This means that we have to look at the NEXT bit of newsto figure out what rumor the market will be buying or selling. To me, it's clear that the globaleconomic environment will come back to the front burner as the #1 driver of stock prices...andthat's bad news for stocks. A good Q2 does not mean that the future is bright. Rather, I believethat Q2 will represent the peak of earnings health. Starting in Q3, good earnings will become a bitharder to come by. Why?
1) Economic indicators are dropping fast.
For all intents and purposes, the unemployment ratehas not budged. Meanwhile, store shelves are stocked again, PCs have been upgraded, etc. Inother words, the pent-up demand that drove the current rebound has almost run its course. Whatlittle remains no longer has the power to drive the economy as it has over the past 18-months.
2) "Follow the money".
This is one of the most powerfully simple rules on Wall Street. Whenmoney is flowing into the economy (i.e. via lower interest rates or stimulus $$$), it's usually goodfor stocks..and vice versa. At present, interest rates can't go much lower and the numerousstimulus programs are losing effectiveness. This means that the money is no longer flowing in.Worse yet, the money that was spent is not generally viewed as having been money well spent.This does not bode well for a new stimulus package to come anytime soon. In other words,money is not flowing in AND doesn't appear poised to flow in anytime soon. In fact, state andmunicipal budgets are being cut (money flowing OUT), while they raise local sales and incometaxes (more money flowing out). if federal taxes go up in 2011, as planned, even more money willbe flowing out. If you follow that, you should be flowing out of the stock market. In short, barring anew stimulus package of other major money-flowing event, I believe the economy slips backtoward recession. Whether or not we double-dip, we will almost certainty slip in that direction.