1) The velocity of money continues to slow.
2) The real unemployment rate continues to be very high (even though the labor force shrinks as people drop out).
3) Debt levels continue to rise.
4) There is no real underlying economic recovery (anemic growth).
5) The actions by the FED of loose money continues (zero interest and QE), which is representative of the poor and continuing deterioration of the underlying market and economic conditions.
6) The sheep continue to be sucked into the trap while trying to convince themselves it is different this time.
7) Technical analysis does not work and why the man behind the curtain has complete control.
- “Pay no attention to the man behind the curtain,” so said the great and powerful Wizard of Oz to Dorothy, the Tin Man, Scarecrow, and the Lion. For if they had looked behind the curtain they would have seen the wizard using machines, levers and stuff to sound strong and powerful. The wizard was using his smoke and mirrors to convince the four to listen to him, and to not believe what they saw.
This past week I had projected a top for Tuesday, but with no "taper" the top was a day later than projected. Also, the FED inaction provided enough "mo" to set new highs, but by Friday close it appeared the short term trend may have indeed turned. So next week expect some pullback.
Longer term chart (to clarify comments regarding longer term):