DIVEST!

September 5, 2015

We now have five signals that the US equity market is entering a Primary Bear Trend (Confirms the prognosis of the S&P Global 1200 Index)

  • Rounding top on both Industrials and Transports
  • The DJ Industrials’ fall to a lower low than October 2014 was confirmed by Transports fall to a lower low (Pink spots)
  • “Death Cross” on both indices as 50 Day MA crossed over of 200 day MA (Green spots)
  • The consolidation of both indices after fall below 200 day MA was followed by sharp declines (Blue spots)
  • On Balance Volume (relationship between buying and selling pressure) of Dow Jones Industrials has fallen to a new low (Yellow spots) (Not yet “finally” confirmed by Transports)

Conclusion

If On Balance Volume chart of Transport Index falls to a new low, there can be no argument that the US equity market has entered a Primary Bear trend

Bloom Observation

One needs to be circumspect about technical analysis nowadays because of the so-called Dark Pools of computer generated trading transactions that are not reported. It is for that reason that technical “confirmations” become far more important than in the days that preceded the insider trading of algorithm driven computers which benefit from advance information. Nevertheless, it seems reasonable to argue that five technical confirmations is sufficient to arrive at a reliable conclusion. The world is entering a new and uncharted era of economic activity.  The time has arrived when Finance Ministers and Treasurers of sovereign countries need to face the fact that the Central Banking assumption – that structural and controlled inflation can be sustained ad infinitum – is flawed. Economic forecasts by models that are predicated on this assumption can no longer be trusted.

My understanding (and expectation) of the above is what led to the decision to write and publish my two fact-based novels, (in 2008 and 2012) which attempt to explain how we got into this economic mess; and which also make some suggestions (for broad based and deeper discussion by the community at large) as to how we might claw our way out of it. They can be acquired in e-book format from either Amazon or Barnes & Noble, depending on your format requirements.  

Bottom line: Energy (not money and banking) is the beating heart of all economic activity.  To be sure the “Energy Return on Energy Invested” (EROI) of fossil fuels has been deteriorating since the late 1970s. Coal is an environmental pollutant, Peak Oil has passed, shale oil and tar sands are merely distractions, and natural gas is a temporary fix that will begin to lose economic traction around 2030. According to the various converging models I have been examining (and developing), humanity has between 10 and 15 years to get its energy house in order. If we fail to attain this objective, the global economy will almost certainly go into terminal decline thereafter. On the other hand (cue economist smiles), if we can succeed in this objective, then humanity might look forward to a glorious future given that the era of Artificial Intelligence will facilitate the realisation of humanity’s full potential.

Related Articles:

Five Technical Bear Signals On S&P Global 1200 Industrials

Global Stock Markets Are Between Apocalypse And Armageddon

Becoming Battered Billionaires

The Mother Of All Bubbles Will Burst In Late 2015

How Much Will The DOW Index Correct In The Developing 2015-2016 Bear Market?

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Brian Bloom….Author, Beyond Neanderthal & The Last Finesse

www.beyondneanderthal.com

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The world’s gold supply increases by 2,600 tons per year versus the U.S. steel production of 11,000 tons per hour.

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