We are close to short-term top. Once Fed is out of the way there is practically nothing to keep the market up.
1. Advances are narrow, led by few stocks.
2. Market internals are weak.
3. Corporate fundamentals are deteriorating.
4. Global growth is slowing tremendously, with recessions looming in Europe and US.
5. Monetary and fiscal policies are running out of steam.
6. Intermarket correlations are diverging, with commodities and risk currencies pointing to further equities decline.
7. Charts are topping out.
8. News flow from Europe is getting worse by the day.
9. Cyclical sectors are stalling and pointing to reversal.
Conclusion: market is making a short-term top. BUT, wait for FOMC meeting to pass. Absolutely NO gambling with Fed! IF unexpected QE3 is announced, it will throw a monkey wrench into my theory.
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