The current rally in the S&P 500 is bringing this market back to key levels of previous support. Normally when you see rallies back to a previous support level, that support level then acts as resistance.
In our earlier videos, we discussed the death cross as well as some of the other key indicators that continue to remain negative on this market. Today, however, I pinpoint exactly where we think this market is going to run into trouble and where you should perhaps look to go short.
You are free to watch this video with no obligation and no need to register, but I would really like to get your feedback on this video as well as this market.
All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub
Did I just hear Alan Greenspan agree with Nouriel Roubini this morning? Did Alan Greenspan say (on CNBC with Maria Bartaroma) that perhaps the big banks should be nationalized? I think Hell has frozen over.
Adam: The employment numbers came in better today---if you can call that materially better..looks like more unemployed people are just dropping off the roles and not being counted because their benefits ran out. This is a false signal.
Second, Europe is still just as bad, if not worse. Greece, by my reconning, is actively defaulting now as many of its bank loans with the sovereign are being renegotiated and written down. The EU reports that stress test reveal that banks will have to raise even more capital(WSJ July 8) The Libor/OIS started to rise rapidly starting May 5, 2010, as the ww markets sold off hard. Libor declined today as the Dow rallied. Libor/ois spread, as you know, is like the VIX banks fear of lending to each other due to possibilities of default risk on banks rising.
I think we may trade in a range, and maybe even rally, but the ability of the Europeans to prevent a Greek default is impossible. Greece will default. I think Spain will too, next year. Their economy is in shambles with 18-20% unemployment already, and they are going to have further auterity measures from here just to pay the interest on their soverign debt.
Bottom line, the Euro will eventually erode further. Its just a question of whether the market will believe that the PIIGS can raise money on the open market for now---only to default later.
Europe is teetering on the precipice of insolvency. The U.S. foreclosures are on the rise. we have done about 2 million, data shows 5.7 million more in the pipeline...how this effects the economy--I am not sure. I assume all the people being forclosed upon already stopped paying and are using their "free rent" to buy other things. When they get kicked out and have to start paying real rent again, this will shift spending to landlords (good for commercial r.e.) but bad for discretionery spending (starbucks, clothes--Apple?)
We are like a ship in irons.
Kathy,
Thanks for your excellent overview of the world economy. I am sure that many of our members would agree with you.
All the best,
Adam