This series of blog posts represents a periodic Technical Analysis of the markets. My last series of posts (5 parts) of this nature was titled “Peril In The Markets?” and started September 13. At the conclusion of that series of posts, I wrote this blog post summarizing my thoughts:
https://www.economicgreenfield.com/2009/09/17/extreme-peril-in-the-stock-market/
Although a stock market crash did not occur in September or October, as I thought likely given the overall situation, my overall assessment of the markets (and the economic situation) is that the level of risk has increased. There continues to be an extreme degree of peril embedded in the financial markets – as well as the economy in general. In my opinion, from these price levels this peril can only be resolved via a crash of possibly extreme magnitude.
Before displaying some charts, I would like to make a couple of disclaimers. First, an extensive overview of all of my Technical Analysis observations would be very lengthy, and it would also infringe upon some facets I consider to be proprietary. As such, I will limit my observations, but I think most people will still get a clear overview of my thoughts. Second, I am aware that many people don’t believe in Technical Analysis. Even though I use Technical Analysis extensively, I will readily admit it is not infallible. As readers of this blog are aware, the majority of my focus is on fundamental aspects of the markets and the economic situation.
Now, on to Part II and some charts…
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SPX at 1036.19 as this post is written
Step back a minute. People talk about the financial markets as if it’s all about the financial industry. The events of 1929 were NOT all about the bankers.
In 1926, the number of railroad track miles in North America reached a peak. Over the next ten years, MOST Americans needed to find different employment, often radically different employment, and in many cases employment that simply did not exist in the 1920s.
In 2008, the United States may have come to the end of the Oil Economy. A LARGE fraction of the stimulus bill other than banking subsidies went to electric vehicles and battery trechnologies. Many towns in the American upper midwest will simply rust out. The new cars will be expensive and the market will grow slowly from a smaller base. It’s the classic crash pattern.
But until the music stops, there’s no point in joining a company where people actually WORK. I have do that in my spare time, because actual work doesn’t pay much. And as you’ve noticed from the unemployment numbers, it’s a lot risker than finance. In the meantime, I want a day job that pays those bonuses I keep hearing about on the news. How can I get in line if I’m over 35?