muses of the moment

April 26, 2009

Markets Are Headed Down Again

S&P 500 Trend

S&P 500 Trend

This chart doesn’t look good. The market is going to go down more before hitting bottom. Although the media spin is, “things are looking better”, it is just spin. Don’t listen.

It looks like Martin Armstrong is correct…market move down and gold up in June. The only question now is next leg-down (to 600 range) or waterfall-effect off the edge. The waterfall looks something like the middle of the chart, but it just falls off the page. We shall see. Let’s take a look at some of the details.

This chart from Chart of the Day says it all. The S&P 500 is testing the trend, but with what?

The credit market is still frozen. Two of the Big 3 will be in bankruptcy before summer. The dollar took a huge hit this week. The “good news” of solid balance sheets and 1st quarter profits of the banks is beyond comical. The bank stress tests are clearly a complete government spin. The IMF has nothing but negative news for the global economy and harsh words for US handling of the the crisis. Unemployment is still rising. Global attacks on the USDollar as a global reserve currency. Another 4 banks closed on Friday, right in line with the FDIC controlled implode of the banking system.

I have taken some small bets on inverse funds against banks and real estate for the next few months.

We have not hit bottom, continue to prepare for more of the same. If you have not protected your 401K or retirement funds for downturn, do so now before the next leg down in the economy.

On the positive side, gold is headed up amidst the chaos.

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