The Fundamentals Behind Global Stock Markets Moving Higher

Global Monetary Policy continues to dominate worldwide stock market movement. The Fed said they would be flexible to increasing or decreasing stimulus should the economy warrant it and the European Central Bank lowered interest rates another .25 basis points last week and reiterated a strong commitment to providing liquidity to the markets. India also lowered interest rates and of course this comes on the backing of Japan announcing a stimulus program 2.5 times the size of the one the United States orchestrated. The economy itself doesn’t seem to be on an accelerated growth path but employment seems to have flatlined, China is still growing at 8%, and Europe hasn’t destabilized any worse.

 

The reason low interest rates are so important to an upward moving stock market is essentially because you can’t make money investing in anything else. When you can only get .5% annually on a savings account, 1.5% on a 10 year CD, or less than 2% on a 10 year treasury bond, those investments just don’t work because remember you are trying to earn money and outpace inflation. With inflation typically running at a 2% clip these are breakeven or losing investments for many years to come. Also, pension plans need to earn more money on a consistent basis in order to reach their obligations to pay their retirees and there is no place to earn those returns other than equities.  Central banks around the world have created the “perfect storm” for higher stock prices and I expect to see that continue until we see a change in monetary policy.

www.GoldbergFinancialLLC.com

With the S&P 500 Now Through 1600 No Top Exists To Worry About...Stocks To Go Much Higher

With the S&P 500 now over 1600, the top that I, and many other on wall street, were worrying about has been taken out. There is now no top for investors to look to as a historic top because historically we have never been so high even connecting prior tops of 2000 and 2008 and adjusting for inflation. From here stocks can and should go much higher being as the funamentals are improving and the prior top was taken out. I felt with the economic data so poor and us approaching the top of a 20 year topping pattern it was likely the market would top out. I was wrong as were many others but from here its hard to see any other outcome than higher stock prices long term.

www.GoldbergFinancialLLC.com

If You Could Go Back in Time and Bet Against Stocks in 2000 or 2008...Would You?

I pose this question as the S&P 500 is sitting at an all time high. Below is the stock market back to 1994. You can see the 2000 top and 2008 tops. They were right around this area. Now they didn't top out and crash overnight but they did top in this area. The market looks to be forming a megaphone type pattern where the next top is a little higher and the next bottom a little lower.

So if you were able to go back in time and bet against stocks up at those levels before, would you have the patience to let it play out? You could have made a killing. If the top area stays consistent then you could make a killing now too if this area is a top. Going by the past tops and patterns, the market is indicating that this area could very well be that market top.

My clients are being positioned in their accounts in just that way but there are only 2 outcomes:

1) 1600 area is a top and the market eventually crashes from here
2) We break through 1600 convincingly and the market moves to heights never seen before

Which do you feel is more likely?

 

 

www.GoldbergFinancialLLC.com

 

Simple Market Analysis on the Impending Sell Off

Here is some simple analysis on the market. The long term chart showed 1600 as a very likely top, I wrote about it for a while and it was a top. We then tried to get back above 1570 3 days ago and could not. This shows us that the most likely top area would be 1570 and not a retest of 1600. This gives us another clue, we are making lower highs. At that point we can ascertain that the trend is weakening (and when combined with my modeling indicators they tell the same story). So we then look at the next support area, investors had been buying along this blue moving average line the whole way up. You can see the support around February 25^th then again around April 7^th when we dipped down and there was heavy buying again. Now you can see from yesterday and today that investors are no longer buying around that line, this shows us another breakdown in the market. These clues all add up to a likely outcome. Its like being a detective, you never know for sure but if you put the clues together and know what you are looking for you are more likely to be right.

All Eyes on 1560 As a Possible Right Shoulder to Complete the H&S Pattern

The most popular topping pattern is a head and shoulders pattern. It has marked many short term tops in the stock market over the last 2-3 years. A move from this 1550 area in the S&P 500 to the 1560 area would complete the pattern and if this pattern forms it is incredibly likely that a sharp sell off will begin.

www.GoldbergFinancialLLC.com

Stocks Down Big Today..Dow Opens Down Almost 200 Points

After several days of me making posts on here that market fundamentals were plummetting and breaking down and that a sell off was extremely likely we end up getting the big sell off today. There is always a catalyst, but the most important thing is the breakdown in fundamentals behind the scenes. Then all you need is a catalyst to blame it on and the sell off ensues. You can look back on my prior posts to see I have been writing about this coming sell off all week.

This doesn't mean everything is going to crumble in stocks just that the modeling indicators I use are in fact very accurate at predicting sell offs before they occur. I believe this can help people with their investments.

www.GoldbergFinancialLLC.com

Market Fundamentals Plummetting Sell Off Extremely Likely Very Soon

With the quick deterioration in these indicators I expect a sharp sell off very soon in stocks. Short and sweet post today. Not much to add.

www.GoldbergFinancialLLC.com