Participants Should Prepare For The Worst Bear Market Ahead
$DIA, $SPY, $QQQ
In past Bear markets participants found comfort from in the market’s history.
In the long term, the trend in stock prices has been up, this time may be very different and participants should be preparing for the worst rather than believing that what worked in days past will work again.
The 200 year up trend in stocks was due to the growth of the US economy, from the nation’s founding til just a few years ago,
Americans could count on growth because of the country’s character, but the character of the country changed as dependence on government replaced initiative for many of The People have become ‘the dependent’ class.
The dependent class, by some measures more than 50% of The People the country, is not generating growth and that holds back the nation’s economy, they are on the dole.
Another factor that drove growth was investor’s desire to build.
Canals, railroads, the interstate highway system and airports fueled growth, now projects like that feed a bureaucracy determined to prevent construction. Without an ability to build, economic potential is limited.
These trends are troubling because the economy is due for a recession. The current expansion is the 5th longest on record as anemic as it is. The record dates back to Y 1857 and includes 33 expansions.
The coming recession will be the 1st to start with interest at Zero+ rates.
Interest rates have always helped correct the economy and that tool is unavailable this time. The impact is likely to be a longer than average recession and a Bear Market that tests the faith of market participants.
The US major market indexes finished Tuesday on a low volume quiet wait to see note: DJIA -13.43 at 17217.11, NAS 100 -24.50 at 4880.97, S&P 500-2.89 at 2030.77
Volume: Trade was below average with less than 800-M/shares changing hands on the NYSE
- NAS 100 +3.1% YTD
- S&P 500 -1.4% YTD
- DJIA -3.4% YTD
- Russell 2000 -3.5% YTD
| HeffX-LTN Analysis for DIA: | Overall | Short | Intermediate | Long |
| Neutral (0.18) | Neutral (0.21) | Neutral (0.18) | Neutral (0.15) |
| HeffX-LTN Analysis for SPY: | Overall | Short | Intermediate | Long |
| Neutral (0.04) | Neutral (0.21) | Neutral (0.14) | Neutral (-0.22) |
| HeffX-LTN Analysis for QQQ: | Overall | Short | Intermediate | Long |
| Neutral (0.10) | Neutral (0.12) | Bullish (0.33) | Neutral (-0.15) |
Stay tuned…
HeffX-LTN
Paul Ebeling
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