Schweizer

Wednesday Outlook: Commodities, Global Markets

Few realize what just happened.

The INDU is in a serious down channel and this bear market rally went up and tagged the upper down channel line, the busted 200-month moving average, and the old 2003-2007 bull market up channel. A "Kiss Goodbye."

We are now heading down which will be fueled by larger Real Estate defaults (CRE, Alt-A, Option-ARM, Jumbo), and large bankruptcies, and maybe even defaults by States (like Calif).

Also, major Bear market bottoms are alway made with a GAAP PE under 10. As of June 2009, the SPX PE was 63. What does that tell ya?

The Big Picture chart which likely will play out, as the market drops to seek that necessary GAAP PE of under 10 floor: i40.tinypic.com/35m0ec...