Well, it’s cloudy in the morning,
gonna be raining in the afternoon.
My stock market work is clear today: both the Dow Jones Industrial Average and the Standard & Poor’s 500 Index are tracing out diagonal triangles in their respective 60 minute charts. This is a very bearish development. A drop of some significance is coming within hours.
The question now is whether the decline will stop short of the January-February lows, or keep on going. A sharp, emotional mini-crash that holds above the earlier lows would lead to a rally to a final new high, at least in the Dow, sometime this summer. This is my favored scenario. We’ll find out soon.
Meanwhile, the bullshit reports out of Washington are masking weakness throughout the economy. Bankruptcies are coming almost daily in the mining sector. Peabody Coal, the world’s largest mining company, being the latest. Auto sales, one of the hot spots lately, due to extremely aggressive lending in the sector (“Come on in, Folks! Fog this here mirror and drive the ride of your dreams out the door”), is suddenly sinking. Real estate is once again a buyer’s market in many areas, but no buyers, especially in the high end. Etc., Etc…
Even with the possibility of a new high, things look awful.