The stock market is sending very negative technical signals
While our analysis suggests a decline possibility of 25% to 30%, there are some points that should be emphasized. Keep in mind that for a bull market in commodities that many of you readers anxiously await, we would need a bear market to occur in industrial stocks. Recently, the stock market is sending some strong technical warnings; the Dow Jones Transportation Average and the Dow Jones Utilities Average, both lead indicators have been quite weak for the last there months. As well, the last six weeks have seen some of the largest total dollar value of officers and directors selling in decades with little buying; their sales totaled over $2,500,000,000. ($2.5 billion) The negative evidence keeps building. Note well that officers and directors are the most informed of all investors. But for three years we have projected a 20% to 25% correction which did not happen! What we had wanted to see was a normal cyclical correction which allows the funds and institutions that must invest the opportunities to buy at cheaper price levels followed by rallies back up. As you know many funds are not allowed to hold large cash positions. It is a “must invest” requirement, despite overvaluation in many companies’ shares. This has created, as in all major market tops a “vacuum.” A vacuum is a way of describing the fact that far too many shares have been bought at the high end of their valuation levels and often at the high end […]