The Stock Market - Update On Increasing Hazards And Risks

Includes: DIA, SPY
by: Ted Kavadas

On October 17, 2011 I wrote a post titled "Danger Signs In The Stock Market, Financial System And Economy." Subsequent updates can be seen on articles dated March 6, February 2, January 12, December 20, and November 21. This post represents the latest brief update to that October 17 post.

My overall analysis indicates a continuing elevated and growing level of danger which contains many worldwide and U.S.-specific "stresses" of a very complex nature.

I have written numerous posts of some of what I consider both ongoing and recent "negative developments." These developments, as well as other highly problematic conditions, have presented a highly perilous economic environment that endangers the overall financial system.

My analysis continues to indicate that there are many reasons for tremendous concern, as seen in many fundamental economic, financial-market, and proprietary measures. While some "problem areas," such as various aspects of the unemployment situation and the relatively anemic economic recovery/expansion are widely recognized, many other measures and immensely disconcerting trends lack recognition, some completely so.

Since my January 11 post I have been writing the following, which I continue to believe:

… my analyses indicate that the danger inherent in the financial system has reached a level at which a stock market crash - that would also involve (as seen in 2008) various other markets as well - has reached a level at which a near-term crash is (at least) a significant concern.

(note: the "next crash" has outsized significance and implications, as discussed in the post of January 6, "The Next Crash And Its Significance")

As reference, below is a one-year daily chart of the S&P500, indicating both the 50dma and 200dma as well as price labels. The current price is 1382.20:

(chart courtesy of; chart creation and annotation by the author)

(Click to enlarge)

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.