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1870 was a key level to break. Below 1810 would confirm the multiyear top is in. The correction down to 1600 near the market tops in 2000 and 2007 is now targeted (at 1x the distance from high of 2135 to the low for the top). That's probably the minimum pullback or the highest price at which the correction would end. It represents a pullback to the breakout of the 2000 and 2007 highs which need to be tested.
That's the technicals , it will be interesting to see what the fundamentals drive it to.
It won't end until most people turn bearish however.
This is more than a correction, I believe. The market is down enough so that it qualifies for a bear market. Expect it to last throughout most of the rest of the year, altho there will be ups short term (in that case, that will be a "correction" to the bear market).
I've read that analysts think it may be a short term bear market, though a bad one, still.
I have a feeling this market is going to trade sideways and volatile for many years. Bad news is good news with QE, if things get bad enough the market will expect free money and go up but be limited cause its still bad. If things somehow magically get good, the market will want to go up but will be limited because there's no free money in site.. this will take years to get out of this mentality. We probably should have a major correction down to like DOW 9000, but I just see this trading sideways for 4+ years.
Maybe I'm naive, but doesn't the stock market ultimately reflect corporate earnings? And aren't corporate earnings (so far) relatively decent?
I understand the whole bit about under-employment of Millennials, Chinese economic foibles, Greece defaulting, North Korean sabre-rattling, kangaroos in Australia miscarrying... and I don't mean to somehow celebrate wealth-concentration or to cheer-lead for swashbuckling mega-banks. But in the end, it's not the private misery of billions of people that tanks the stock market; it's corporate earnings. It's not the ghost-cities in China, or refugees in the Mediterranean; it's corporate earnings. Look what happened to corporate earnings in 2000 and in 2008. But what is happening now?
It's as if we decided to have sharp bear-market from sheer boredom or peevishness.
Maybe I'm naive, but doesn't the stock market ultimately reflect corporate earnings? And aren't corporate earnings (so far) relatively decent?
I understand the whole bit about under-employment of Millennials, Chinese economic foibles, Greece defaulting, North Korean sabre-rattling, kangaroos in Australia miscarrying... and I don't mean to somehow celebrate wealth-concentration or to cheer-lead for swashbuckling mega-banks. But in the end, it's not the private misery of billions of people that tanks the stock market; it's corporate earnings. It's not the ghost-cities in China, or refugees in the Mediterranean; it's corporate earnings. Look what happened to corporate earnings in 2000 and in 2008. But what is happening now?
It's as if we decided to have sharp bear-market from sheer boredom or peevishness.
Most "earnings" that you hear about are estimates of future earnings. In terms of current earnings on the SP500 - they're down 14.44% YOY - while the SP500 is down 8.53% YOY - as of the close on Friday. Robyn
As illustrated in the book a random walk down wall street and then researched to a higher level by ned davis research corporate profits and the markets do not track each other well.
The higher corporate profits are the less the market gains. Markets have their best gains when profits are slightly positive to slightly negative.
I am away and on my nook so i don't have access to the data on my computer but when i get home in a few days i will try to remember to post the actual figures from the relation ship
I don' t think we can be more bearish in the near term. We all see and feel the same thing right now.
The only thing that differs is the strategy for dealing with the crappy outlook.
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