Is This the Last Hurrah For Stocks?

Phoenix Capital Research's picture

The clock is ticking.

 

Traders have been trying repeatedly to force an upwards breakout in the S&P 500. Thus far they have failed. And now the market is coming up on support.

 

 

 

The significance of that lower line cannot be overstated. This is the trendline that has supported the rally in stocks going back to mid-2013.

 

 

This is something of a last hurrah for stocks. We are now officially in May. And historically the period from May to November has been one of the worst periods for stocks from a seasonal perspective.

 

Moreover, the fundamentals are worsening dramatically for the markets. By the look of things, 2014 represented the first year in which corporate sales FELL since 2009. Sales track actual economic activity much more closely than earnings: either the money comes in or it isn’t. The fact that sales are falling indicates the economy is rolling over and the “recovery” has ended.

 

Having cut costs to the bone and issued debt to buyback shares, we are likely at peak earnings as well. Thus far 90% of companies in the S&P 500 have reported earnings. Year over year earnings are down 11.9%.

 

So sales are falling and earnings are falling… at a time when stocks are so overvalued that even the Fed admits it. This has all the makings of a serious market collapse. And smart investors are preparing now BEFORE it hits.

 

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

 

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Best Regards

Phoenix Capital Research

 

 

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JoWazzoo's picture

SPX has been playing with 20 DMA and that trend line is support and if broken hard, we should know what the direction of break out is.  Then again - maybe not.  The Algos seem to be happy moving up and down in the nice channels.

 

And between the HFTS and algos along side all the buying support from Corp buybacks and corp & govt POB buying, stawks will be hard pressed to fall hard.  Period.  Until they do.  But how much money are you willing to blow on Puts to find out?

LithiumWarsWAKEUP's picture

Phoenix Capital writes: "And now the market is coming up on support.".  

 

    Uhh, define 'support'. Define Resistance. Do you know the difference. Let me answer for you. 'no, you don't'.

    Fixed. :)

dumdum's picture

 

 

I think Phoenix is saying, that now the market has failed to get through resistance capping the market, is now coming back to the long term supporting trendline. That's my interpretation. 

SPONGE's picture

misplaced comment

rsnoble's picture

Rising wedge bad.  Free money makes rising wedge even bigger. 

We are very close to a breakout, if it's gona happen has to be soon.  And you can count on Fuck Fest Friday to deliver it.

AND............it most likely will be attributed with the passing of TPP.

Fun Facts's picture

The Central Wanksters now own over 50% of global equities.

They of course realize that if they quit buying, they will lose their political support and end up on tow ropes bumping along the sidewalk behind Chevy Suburbans.

Savyindallas's picture

I don't doubt it. Do you have a source or link for that 50% figure. I wonder how much higher it can go -as long as they can print money, buy on unlimited margin - what's to keep them from owning everything? 

gmak's picture

Oh. I don't know. Look at Oct / Nov 2014 on the chart. Can just as easilyl happen again. 

Comte d'herblay's picture

What if they gave a crash and nobody came?

The possibility of treading water for a very long time, like years,  is totally not thought of in your philosophy, is it, Horatio?

hungrydweller's picture

Phoenix the Broken Clock.

christiangustafson's picture

Bearish wedges and a plausible ending-diagonal would send us right back to 1820 SPX for our first bounce.

It would be nice to see a couple of Hindenburg Omens this week to hint at the decaying internals.

CarpetShag's picture

Watch the Bollinger Bands trisect your oscillator, mark my words.

SPONGE's picture

could you kindly explain "trisecting your oscillator"?

JoWazzoo's picture

Now THAT sounds soooooooo sensual!  Throw in a doji and we could sell it as algo porn.

 

And then he trisected her oscillator with a doji.

 

[Note to self - must get away from the tapes.]

christiangustafson's picture

Damn straight. 

Preach the Gospel, brother Shag.

KnuckleDragger-X's picture

Watching the ticker today and have to note the 'frothiness. I wonder just how many algo's have had their market parameters changed and I wonder how long till we have tactical nuclear algo's....

JoWazzoo's picture

There is continuous spoofing and layering by Algos in SPY on the bid side.  Recently I have noticed a wee bit of spoofing and layering on the Ask side as well.  Effing A!  Dualing Algos.  Let em get it one.