EconomicGreenfield

On October 17 I wrote a post titled “Danger Signs In The Stock Market, Financial System And Economy.”  This post is a brief third update to that post.

My overall analysis indicates a continuing elevated and growing level of danger.

I have written numerous posts of some of what I consider both ongoing and recent “negative developments.”  These developments, as well as other highly problematic conditions, have presented a highly perilous economic environment that threatens the overall financial system.

The “downside” of potential price depreciation among many asset classes is substantial, as many asset classes are currently “asset bubbles,” a topic that I have extensively written about.

As far as the stock market is concerned, I don’t believe the October 4 1074.77 low on the S&P500 will prove to be a “lasting bottom”, and the dynamics as described in the October 20 post (“Thoughts On The Next Stock Market Decline“) and other disturbing long-term “downside” considerations still apply.

As reference, below is a 1-year daily chart of the S&P500, indicating both the 50dma and 200dma:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1205.35 as this post is written

On October 17 I wrote a post titled “Danger Signs In The Stock Market, Financial System And Economy.”  This post is a brief second update (the first being on November 18 titled “Building Financial Danger – An Update“) to that post.

My overall analysis indicates a continuing elevated and growing level of danger.  There are many worldwide and U.S.-specific “stresses” of a very  complex nature.

While many take comfort in a variety of recently improving economic indicators and historically positive stock market seasonality, in my opinion this type of extrapolation from historical norms is largely inappropriate given the unique and highly perilous situation the overall financial system is facing.  I have written numerous posts of some of what I consider both ongoing and recent “negative developments.”

My analysis indicates that this continues to be an environment of rising risks and therefore is very dangerous in nature.  As far as the stock market is concerned, I don’t believe the October 4 1074.77 low on the S&P500 will prove to be a “lasting bottom”, and the dynamics as described in the October 20 post (“Thoughts On The Next Stock Market Decline“) and other disturbing long-term “downside” factors still apply.

As reference, below is a 1-year daily chart of the S&P500 (plotted above, indicating both the 50dma and 200dma) and the VIX (plotted below in red, with a rising trendline displayed in dark blue):

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1238.34 as this post is written

On October 17 I wrote a post titled “Danger Signs In The Stock Market, Financial System And Economy.”  This post is a brief update to that post.

My overall analysis continues to indicate that there is an elevated and growing level of danger.

Many prominent parties seem to be fixated on the European financial problems, and seem to be overlooking other problem areas.  While I believe that the European debt problems are very serious and have broader implications, (as explained in yesterday’s post “Europe And Contagion – Broader Implications“) the other problems are of great concern as well.

Overall, my analysis indicates that this continues to be an environment of rising risks and therefore is dangerous in nature.  As far as the stock market is concerned, the situation as described in the October 20 post (“Thoughts On The Next Stock Market Decline“) still applies.

As reference, below is one view of the stock market that I find interesting.  It is a 1-year daily chart of the S&P500 (through November 17) with annotations by Ron Walker of the The Chart Pattern Trader:

(click on chart to enlarge image)(chart courtesy of StockCharts.com, annotations by Ron Walker)

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1216.13 as this post is written