Schweizer

How Much Longer for This Rally?

SO .... How much longer, as the title suggests??

70% beat earnings expectations but also likely 70% missed revenue expectations, but let's not discuss that fact.

With China stimulus ending, Q2 likely was a flash in the pan, especially for tech stocks. There needs to be real, sustained, aggregate demand - it's not happening yet and likely won't happen for a long time as we are going through a cultural shift away from debt, but it is debt (lending) that Washington hopes we embrace again to get the economy going. Not gonna happen.

Tuesday Outlook: Commodities, Global Markets

Meredith is a Bear, and she and other smart bears got what they wanted by this bull trap move, a higher price to enter short.

Well played MW!

Thursday Outlook: Commodities, Global Markets

In simple turns, we've topped and bounced off the bear market trendlines. Now we head to the other side of the channel:
i42.tinypic.com/30cq0s...
i44.tinypic.com/21l8n6...

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...

Tuesday Outlook: Commodities, Emerging Markets

The Obama budget was the trigger. It suppresses economic activity rather than promotes it, and it punishes anyone trying to make a profit through increased taxation to feed an ever increasing government. This is the exact opposite of what's needed.

I didn't think he was that stupid, but I am obviously wrong.

Friday Outlook: Commodities, Emerging Markets

Attention Bottom callers. Notice David's SPY monthly chart. In the last Bear Market in 2000-2003, the MACD histogram low point came 2 years before the Bear bottomed and the loss was an additional 40% from that MACD histogram low point.

The 2007-201X Bear market has yet to see the MACD histogram low point, suggesting a 40% or more drop is virtually certain.