The Start Of A Bear Market?

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Friday, the 5th of August.

Ladies and gentlemen, the market action yesterday was real. Please be aware that we have started on a bear market. As we have pointed out in our previous updates, we were looking for a move to the downside. That has now happened with all our indicators firmly in negative mode.

Most folks who are not in their 60s do not remember the bear markets of the 70s and 80s which caused a tremendous amount of pain for investors. It seems as though we just kicked the can down the road for the last time. The markets are bringing common sense back and they will find a solution for the economy.

President Obama came on the TV today to reassure everyone that it was not his fault that the stock market was down, it had to do with Europe, the tsunami in Japan. Mr. President we are and have been in a global economy for years. It's too bad that Ben Bernanke and you don't understand that.

Folks who saw their 401(k) and IRA retirement accounts decimated in 2008 are having a déjà vu moment. In the last 10 days the S&P 500 has lost over $1 trillion and we expect it will lose more. A simple solution to get America running again is to cut corporate taxes to 25%. Money will pour in, corporations will start hiring again and start building business. Corporations are the ones that create business and pay taxes in this country. It's not the government that pays taxes.

So, President Obama will you please help give businesses the environment to thrive in, less regulation, less taxation? This is the only way for the country to get out of this recession.

The key element which is overriding everything right now is the current market psyche... Scared. Last night every TV and cable show's lead story was the market crash. If the market closes lower today, everybody will be frantic and worried about their investments over the weekend which means we'll probably see a continuation early next week to the downside. The equity markets are getting close to a 61.8% Fibonacci retracement level of 1148 for the S&P 500 index. We expect that this level will be reached. We would expect to see some profit taking at that area and a modest retracement back to the upside. That is not to say we are bullish, it just means we going to see some profit-taking coming into this market.

I would like to thank everybody for their positive feedback! We are thankful we can help you muddle through this extremely volatile time in the markets.

So let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.

S&P 500

Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100

Watch Video for update.
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SILVER (SPOT)

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55

Watch Video for update.
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GOLD (SPOT)

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 90

Watch Video for update.
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CRUDE OIL (SEPTEMBER)

Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100

Watch Video for update.
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DOLLAR INDEX

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 65

Watch Video for update.
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REUTERS/JEFFERIES CRB COMMODITY INDEX

Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100

Watch Video for update.

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Here’s some good news that you can benefit from today: MarketClub has teamed up with PMI, a leader in the education field, to offer personal coaching for MarketClub. That’s right! Now you can have your own personal coach and learn the many market secrets of MarketClub.

Give us a call today at 877–219–1482 and see if personal coaching is right for you.

This is Adam Hewison for MarketClub and I’ll see you tomorrow right here, at 1pm. Have a great trading day.

As always, we rely on our market proven Trade Triangle technology for catching the big moves.

Every success,
Adam Hewison
President of INO.com
Co-founder of MarketClub.com

21 thoughts on “The Start Of A Bear Market?

  1. GE only paid 5.3% in taxes when Bush was President, so obviously Bush and the GOP wanted to increase Socialism too....
    Just say no to socialism...
    Say no to city garbage collection (you should pay more and have a private company do it)
    Say no to public water works (you should pay what ever the private business wants to charge you)
    No to Public Utilities...
    No to city leaf removal and snow plowing.....
    Get rid of all the socialism and let free market take care of everything....

  2. @rusty So wait, you're saying that the President is colluding with Republicans to destroy the country then? Because they are doing that just fine on their own without any help..

  3. "So, President Obama will you please help give businesses the environment to thrive in, less regulation, less taxation? This is the only way for the country to get out of this recession."
    He has no interest in hearing what you have to say. His agenda does not include prosperity for the U.S.
    As soon as we all realize that this so-called president puppet is systematically trying to destroy this country then we can address ways of countering this emminent demise.

  4. leave President Obama alone. This current fiscal crisis was caused by angry, jealous republicans.The last fiscal crisis was caused by greedy, irresponsible republicans.Be that as it may ,this downturn will come to an end by late Sept if not sooner-1st prediction. And my 2nd prediction is that on Nov 5 2012 President Obama will be reelected possibly by a land slide.

  5. Bear market? I don't think so. The drop was just Wall St playing its games. Watch the automotive figures. We will bounce off the 61% retrace. The economy still has some kick left.

  6. If lowering taxes and regulation was the answer, we should be in a rip roaring bull market because Bush did that over 10 years ago and yet we're still in this mess. In fact, one could argue that lower regulation, i.e. regulation of the derivatives market and baskets of risky home loans put together will false ratings, and banks just moving bodies into homes so they could sell the loan to someone else, caused this recession in the first place.

    So neither lower taxes, or lower regulation helped prevent this recession. Therefore logically, they can't be the solutions.

    A bailout for the rich bankers and corporations helped prop them up, but did nothing for the consumer. Businesses don't hire because of a tax break. Businesses don't hire because of a loan from the government. Why do you think corporations are hoarding money? The only reason businesses hire is from an increase in demand for their products and services. Without consumer demand, helping prop up banks and corporations with government loans and tax cuts is just delaying the inevitable. Remember, 70% of GDP is consumer demand driven.

    The bailout for Wall Street with little for main street is a faulty economic stimulus model. Remember, after all your fancy and complicated political ideology is done, and the sunsets at the end of the day, it's all simply about consumer demand/jobs.

    1. Lance,

      Thanks for your feedback. I agree with many of the point you make. In the end it is all about jobs.

      All the best,
      Adam

  7. Lowering taxes and reducing regulation is your answer? Well I have a much less sociopath-friendly answer. Third world countries should stop letting corporations abuse their citizens and their environment, so that the already insufficient amount of taxation and regulation we have in this country won't be something these sociopathic corporations can escape from.

  8. With the end of QE2 the Fed will no longer be buying treasuries. However if the stock market goes down there becomes a new buyer of treasuries as investors exit the equities market and buy treasuries. Just saying.....

  9. ABSOLUTELY RIGHT ON ANDY. THEY CUT CORPORATE TAXES ANYMORE AND THEY WILL BE GIVING THEM OUR TAXPAYER DOLLARS

  10. COULDN'T AGREE MORE WITH ANDY. CORPORATIONS ALREADY SEEM TO BE TAX EXEMPT, SO IF YOU CUT THAT ANOTHER 25 PER CENT, THEY WILL BE GIVING MONEY TO THEM....

  11. GE pays no taxes cause they are connected to Obama and the Dems. They help their own. The tax rates hurt small businesses, which are the backbone of the economy and the job market. Obama got what he wanted yesterday; a downgrade of Fed debt. According to him and the way he was taught, a crisis is a terrible thing to waste so we need to create more of them, after all, the goal is complete socialism and eternal power.

  12. Your comments have no basis in fact. The mantra of lower corporate taxes will lead to higher employment has been disproved by the large corporations that already pay zero taxes and keep shipping jobs overseas.

  13. Thanks Adam,
    Your comments are spot on. We cannot just hope that things will fall in place and the USA (and major world economies) will come out of doldrums. It is time that the politicians, reserve banks and the corporations work together to create jobs and increase revenues. No one is going to come out of recession by cutting cost. We need the economies to expand and not contract.

  14. The Start Of A Bear Market?
    NOT AT ALL!!
    The Market had been basking in the sun of artificial sunshine from The Federal Reserve for 2-1/2 years. Now it is time to "Pay the Piper" big time and return to the SECULAR BEAR MARKET of 2008, plain and simple. The FUNDAMENTALS do not support the market levels of two weeks ago. The point and figure chart for the INDU in stockcharts.com today gives a BEARISH price projection of 9500.0. THAT is more realistic. THE TIME HAS COME TO FACE REALITY!!!

  15. So Adam,

    If GE paid 0 taxes and we cut that by 25%, how's that gonna help?
    I'm not against fair taxation,but that seems pretty unfair to me.

  16. the ten year moving average on the S+P gave the market a kick today and the market is above it. It is surely possible that the Market was retracing to this level and also got support at around the 50% level from the last upward move.
    3 distinct waves of this post 08 rally have been completed and although i am not constrained by pure elliot wave theory it is possible that we are witnessing a 4th wave which may keep the bull market intact.

    Base building is what a bull wants to see at this level a "dead cat bounce" will lead to a weekly lower top and as Adam says an almost certain start of a Bear Market.

  17. One should only invest in the market if they can
    read charts and invest accordingly. Market club gives clear signals
    as to when to be long or short a market and when going to
    cash makes sense. I use market club in conjunction with real time
    charting of e-signal. I could not even imagine trading without either
    of them

    I doubt we will EVER be in a market like the bull market from
    the late 1980's to 2000 where you could just buy and hold
    and you would always make money.

    I do well no matter what the market is doing.Thanks Adam for
    a great service.

  18. if you believe in ebb&flo, ying-yang, the tides or the elliot wave, then the start of a bear market is a reasonable conclusion. just a matter of timing

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