U.S. Stock Market – Weakness in the final hour strongly suggests the tremendous bear market rally is petering out. Technically, you can’t rule out another try to the upside but unless breath and volume greatly expand, it would just set us up for an even bigger decline. Remember, I don’t believe we’re straight down this time around but rather a slow bleed for several months ahead.
While the “Don’t Worry, Be Happy” crowd has pulled out all stops in their quest to
manufacturer “green shoots”, what we’re likely to witness at best is a lessening of the descent in economic activity. The “happy” people would like you to believe we can go from crash to recovery without a recession. Maybe on CNBC that can play (after all, it’s the home of fantasies) out but in the real world we’ll need many months of flat growth before any sustained recovery can take place.
Foreign Stock Markets – As you know I sold off all exposure to equity markets worldwide. If you put a gun to my head (I hope this doesn’t give anybody thought), I would have exposure to China but even there the recent pop up economically seems to be flattening out. (more)
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