Nearly all men die of their remedies,
and not of their illnesses.
Here we are, staring over the abyss. And for the day, the market held up at the critical level of Dow Jones 16,000, give or take a few. Based on pattern, if the market holds right here, it should rally in three waves over the next few months to a new all time high. After that, the inevitable crash.
Frankly, I’m rooting for a rally here. A new high in the Dow in a couple of months would make for a more elegant ending of the pattern, but that’s just the Elliott Wave geek in me coming out. The next few days will tell. Meanwhile, every data point in the economic picture is crashing in a big way.
From Zero Hedge:
U.S. Freight volumes fall year over year for the first time in three years.
Business inventories to sales ratios are at levels that signal recession ahead, with inventories stuffing the channels and sales falling 1.6% year over year.
Industrial production crashes most in eight years.
The consumer is tapped out, as retail sales end the weakest year since 2009.
Commodities are falling hard, oil is now $29, the lowest level since 2004.
Little international shipping moving in commercial bottoms, as the Baltic Dry freight rate drops to depression levels.
By rights, we should be owning up to the recession at hand right now, but denial is the official stance, although rumor has it some of the members of the Fed’s board of governors are getting spooked.
And I haven’t seen where a single one of the country’s most respected economists are coming off their bullish forecast.
So be it.