It is late evening and my time is short. Nonetheless, I simply wanted to repeat the bearish theme I have developed recently.
Although seasonally and statistically, we are now within the normally optimistic and positive equity biased USA Thanksgiving holiday week, the equity markets looked extremely vulnerable today.
A late day equity rally was equally suspicious, and yet we must also assume a sell-off this week could be halted by the USA PPT, or even the aftermarket stabilization team from Wall Street dealers, as they attempt to prevent the massive GM from heading south too soon.
One thing however is very clear. There are many troubling global events at present. After my analysis today, I again concluded that this is a global equity market that is living on borrowed time.
The only thing missing now is the financial catalyst event and media spin to explain any sell-off. Be warned, even a watershed sell-off would not be surprising to see. Indicators are VERY WEAK.
Along with the charts here are a few analysis thoughts......
Logical Analysis = SELL
1. With the global debt crisis in the Euro Zone resurfacing, the USA dollar could rally (against a weaker Euro). This would set-off a renewed deflationary sell-off in both stocks and commodities.
2. China spends vast amounts on currency wars and maintaining their low Yuan rate. Since Japan and China are the two largest foreign owners of USA debt, they have a large vested interest to see the USA currency rise. The recent QE2 events suggest currency wars too are heating up. Most agree the USA dollar is in trouble with the FED excessive money printing, but on the flip side, few realize the FED also has massive dollar swaps with foreign central banks abroad, that must be eventually repatriated. These are both causes for a higher USA dollar. Again, a higher USA dollar even if temporary, would have a potential negative impact on prices of commodities and equities.
3. Wall Street scandals continue and frankly, the public is on the verge of revolt and anger, if banks and brokers that break laws are not prosecuted. It is long overdue a time to level the playing field for market participants and instill a sense of law and order on Wall Street. Read the latest USA financial scandal by clicking the link. Insider Trading Scandal
Technical Analysis = SELL
1. Check out the technical indicators in the SP500 chart below. They remain weak and suggest that a the down trend must soon resume.
2. Then, add some advanced analysis and market logic of Natural Law in the way of W.D. Gann (Gann Box) and Elliott Wave. Note, that both of these market wizard mindsets would now also likely agree that this is an equity market to sell; now.
3. Finally, we said it before and will say it again for the record. We hinted about the coming Fibonacci event in recent past blogs. We suggest you go back and check that former post and look carefully at the chart. We have also stated that Fibonacci math is both universally systemic, and it is amongst the most important to heed in the Financial markets. In early December there is a coming Fibonacci hot-spot.
Exhibits
Sincerely,
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
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