bear market

04
Dec
2015

Is the Bull Market Over? These Charts Say So

For weeks we have been warning not to trust the bounce in stocks. We were worried that a Bear Market had begun.

The most critical item we were concerned with was the fact that the S&P 500, despite its massive bounce, had failed to regain its former trendline. This would suggest a Bear Market was possibly about to begin

As we first noted back in early September, Bear Markets do not happen all at once. EVERY time a major top has formed and stocks have taken out their Bull Market trendline, we’ve had a bounce to “kiss” the line before the Bear Market really took hold.

sc 8.41.39 PMThis is precisely what has happened with the October bounce: stocks rose to “kiss” the former trendline, but failed to reclaim it.
123151Having failed to reclaim this line twice, the S&P 500 is now turning sharply down. The financial media sees this as a reaction to ECB President Mario Draghi’s failure to do “enough” this morning, but the reality is that this was not to be trust, driven primarily by manipulation with little carry through from REAL buy orders.

In the near term stocks could crater to 1900 in short order. However, what happens in the next few days or even weeks is not the real concern.

The REAL concern pertains to the BIG PICTURE for the markets: the massive monthly rising wedge pattern stocks have been forming since the 2009 bottom.

As you can see in the chart below, the August-September collapse broke this formation. That, in of itself, is not the be all end all. But the fact that stocks have failed to reclaim their former bull market trendline is a MAJOR concern indicating that it is highly likely that the bull market begun March 2009 is OVER. A Bear Market will have begun.

sc-1 12.31.10 PMIf this is the case, the next Crash has already begun. This would put us at the equivalent of where the markets were in late 2007: just before the whole mess came crashing down in 2008.

Smart investors are preparing now. The August-September correction was just a warm up. The REAL drop is coming shortly.

We just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

We are giving away just 1,000 copies for FREE to the public.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

 

 

 

Posted by Phoenix Capital Research in stock collapse?
23
Sep
2015

The Market Has Run Out of Props

The stock market is rapidly running out of props.

First off, corporate sales and profits are rolling over. As Charlie Bilello recently noted, we’ve had two straight quarters of Year over Years drops in corporate revenues.

rev2Moreover, corporate profits are also falling at a pace usually associated with recessions:

Profit growth for the S&P 500 companies is at its weakest point since 2009. That’s because, in fact, there isn’t any profit growth.

S&P 500 earnings for the first half of the year are expected to show a 0.7% contraction compared to a year ago, according to numbers from FactSet research. Growth in the first quarter was a meager 1.1%, but the second quarter is more than offsetting that, expected to contract at a 2.2% rate, FactSet estimates. The last time the S&P 500 saw a year-over-year decline for the first half of a year was 2009, when earnings positively cratered at the depths of the global recession, down 30.9%.

Source: Wall Street Journal

With the fundamentals no longer supporting a stock rally, this leaves the Fed and momentum as the sole providers of support for stocks.

Regarding the Fed, it failed to raise rates for the umpteenth time last week. Despite this, stocks actually FELL on the news.

GPC 9-22-15One by one the various Fed doves are throwing in the towel. Sure, they might refuse to hike rates right now, but we’re a long ways from when Bernanke said that QE was a success because stocks were rallying. The Fed realizes that it is in the political crosshairs because QE has exacerbated wealth inequality.

Fed President Fred Bullard even chastised Jim Cramer for being a perma-bull this morning. This is the same individual who desperately claimed the Fed should hold off ending QE back in October 2014 to prop the stock market up (mind you, he wasn’t even a voting member of the Fed at that time, so this was nothing more than verbal intervention).

In simple terms, the current political climate will not permit the Fed to ease any more unless we enter a full-scale market meltdown. At best there will be verbal interventions, but the Fed is out of the stock juicing business for now.

This leaves the market’s momentum/trend as the sole remaining prop for stocks. Unfortunately both have been broken.

GPC 9-22-15-2

Sure, the markets may bounce here and there (stocks posted eight moves of 16% or greater when the Tech Bubble burst) but we are officially in a very negative environment for stocks. Smart investors should prepare for a bear market and possibly even a Crisis.

If you’ve yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis “Round Two” Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.

We made 1,000 copies available for FREE the general public.

As we write this, there are less than 10 left.

To pick up yours…

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Our FREE daily e-letter: http://gainspainscapital.com/

 

 

Posted by Phoenix Capital Research in It's a Bull Market