Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - 22nd Jul 17
Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts - 22nd Jul 17
Warning: The Fed Is Preparing to Crash the Financial System Again - 21st Jul 17
Gold / Silver Shorts Extreme - 21st Jul 17
GBP/USD Bearish Factors - 21st Jul 17
Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing - 21st Jul 17
Is It Worth Investing in Palladium? - 21st Jul 17
UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - 21st Jul 17
The Fed May Show Trump No Love - 20th Jul 17
The 3 Best Asset Classes To Brace Your Portfolio For The Next Financial Crisis - 20th Jul 17
Gold Stocks and Bonds - Preparing for THE Bottom - 20th Jul 17
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17
The Socionomic Theory of Finance By Robert Prechter - Book Review - 18th Jul 17
Ethereum Versus Bitcoin – Which Cryptocurrency Will Win The War? - 18th Jul 17
Accepting a Society of Government Tyranny - 18th Jul 17
Gold Cheaper Than Buying Greek Villas in 2012 - 18th Jul 17
Why & How to Hedge the Growing Risks of Holding Stocks - 18th Jul 17
Relocation: Everything You Need to do for a Smooth Transition Abroad - 17th Jul 17
A Former Lehman Brothers Trader: It’s Time To Buy Brick And Mortar Retailers - 17th Jul 17
Bank Of England Warns “Bigger Systemic Risk” Now Than 2008 - 17th Jul 17
Bitcoin Price “Deja Vu” Corrective Sequence - 17th Jul 17
Charting New Low in Speculation in Gold and Silver Markets - 17th Jul 17
Bitcoin Crash - Is This The End of Cryptocurrencies? - 17th Jul 17
The Fed's Inflation Nightmare Scenario - 17th Jul 17
Billionaire Investors Backing A Marijuana Boom In 2017 - 17th Jul 17
Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - 17th Jul 17
Gold and Silver Biggest Opportunity Since Late 2015, Last Chance at These Prices - 17th Jul 17
Stock Market More to Go - 17th Jul 17
Emerging Markets & Basic Materials Stocks Breaking Out Together - 16th Jul 17
Stock Market SPX Uptrending Again After Microscopic Correction - 15th Jul 17
Global Currency Reserve At Risk - 14th Jul 17
Picking Great Gold Stocks - 14th Jul 17
BBC Tree Expert's Verdict on Sheffield Amey / Labour City Council Tree Felling's - 14th Jul 17
SPX Cycles, Fed Funds and Gold - 14th Jul 17
Should Platinum Be More Expensive Than Gold? - 14th Jul 17
What's Next for US Dollar, Stocks, Bonds and Gold? - 13th Jul 17
India Gold Imports Surge To 5 Year High – 220 Tons In May Alone - 13th Jul 17
Gold and Silver: Your Stomach Is Probably Wrenching Right Now - 13th Jul 17
Gold Industry Is In A Deep State Of Dysfunction, Delusion And Denial - 13th Jul 17

Market Oracle FREE Newsletter

Crude Oil, Gold, ETFs & more: Pro-grade Market Forecasts

Euro-zone Trauma Means Stock Market Technical Weakness Continues

Stock-Markets / Stock Markets 2012 Nov 13, 2012 - 07:44 AM GMT

By: Christopher_Quigley

Stock-Markets

Best Financial Markets Analysis ArticleThe technical picture in the market continues to deteriorate. The divergence between the Dow Transports and the Dow Industrials has been resolved with both indices now adopting a bearish stance. The Dow 30, the Dow 20 and the NASDAQ are all trading below their 200 day moving averages. The S & P 500 is only 3 points above this important technical level. In addition, with regard to market breath, the 20 day moving average has crossed the 50 day moving average on the McClennan Summation and the NYSE Advance/Decline Line. I am a great believer in market breath indicators so I reckon we are on the cusp of a bear trend turning into a bear market. It is all in play as we speak but for me the deciding indicator will be the Dow Transports. As mentioned in the October brief, should this index break below the 4850 level decisively, in all probability the bear trend will have gained "legs to last".


Many reckon that the "fiscal cliff" will be quickly sorted and that the positive trend in the American economy will resume. I am not so sure. This was no "ordinary" election. The Republican Party, following the "tea party revolution", is not the "normal" Republican Party. The issue is no longer simply economic. It has become one of identity and meaning, thus the party has become "evangelical". Previously a democratic president could always rely on doing a deal with some breakaway republicans to swing a mandate. Not so today. Any republican that breaks ranks will be seen as a total traitor to a higher cause and banished. This was why there was no fiscal breakthrough last year. The same dynamic will make it even more difficult to negotiate a resolution this second time around.

The closer the economy gets to the cut-off date the more volatile the situation is going to become and I read in the technicals that the market sees a difficult time ahead. I hope I am wrong and that the Transport Index holds.

Dow Industrials: Daily


Dow Transports: Daily


NASDAQ: Daily


S & P 500; Daily


European Trauma:
The European saga with regard to austerity continues apace making one wonder what American and Chinese politicians think of the sham that is Eurozone "financial management".

Spiegel Online: 11th. Nov.
"The disbursement of the next loan tranche to Greece will be significantly delayed, German Finance Minister Wolfgang Scheuble confirmed.

"At the moment I do not see how we can come to a decision on Greece and with Greece at the end of next week, it would be too early," Scaeuble told an economics forum in Hamburg. “We are not out of the woods with Greece yet,” he said, according to news agency Reuters.

Last week, the German minister had said that the troika still has plenty of unanswered questions on Greece and that its work is far from over. According to Reuters, Schauble added that for a large majority of eurozone countries a debt restructuring for Greece is not legally possible.

EU Economic and Monetary Affairs Commissioner Olli Rehn also stressed on Thursday last that there remained a few more steps to take before the Eurogroup makes its final decision on Greece. “There is no denying that it [Greece's debt] is increasingly unsustainable without further measures”, Rehn told reporters in Brussels.

Earlier in the week, in an interview with Reuters, Rehn had said that the IMF, EC and ECB troika were working with the Greek government to find a way to cut the debt to a more sustainable level.

"It is important to look at ways and means to reduce the debt burden of Greece. We are currently doing this together with the IMF and the Greek government and it may be a combination of factors related to the length of maturities and level of interest rates of official loans," Rehn said.

"However, no haircuts of official loans are on the agenda and they are not necessary," Rehn added."

Greece needs a reprieve in the next few days else its public employee and bond interest cheques will start to bounce. The European Commission will do anything to keep Greece in the Euro and is thus in favor of granting her longer repayment terms and debt write-off. Yet Germany refuses to publicly consider a new bailout. The IMF is also on the side of maintaining original terms. Somebody will have to square all this by the end of the week. It's my guess that Germany and the IMF will be brought to heel, as the formal bankruptcy of Greece would lead to its immediate departure from the Euro and this cannot be contemplated. There is nothing like the abyss to open folk's minds and wallets.

Meanwhile in Spain the austerity measures continue to tear the social fabric apart. 400,000 homes are in foreclosure with no end in sight. Prime Minister Mariano Rajoy held emergency meeting with banks yesterday to try to implore them to become more lenient with borrowers. This initiative was forced on him following widespread outrage when Amaia Egana, a 53 year old woman from the Barcalda district, committed public suicide when banks tried to force her from her property.

In the Catalonia region of North Eastern Spain things have become so bad that there is now a growing movement to secede from the Spanish state. Regional president Arthur Mas, who favors secession and wants to hold a referendum, is expected to be re-elected November 25th. King Carlos had stated that secession could lead to the total breakup of Spain and a collapse of the Catalonian economy. He has vowed to prevent it. The Catalonian populace, in the majority, wants to withdraw from the Spanish state but remain in the Euro. The European Commission has gone on the record saying that this would not be possible.

In France, Great Britain and Italy authorities are getting tough with large American public corporations that use strident tax avoidance measures to mitigate taxes. The representatives of entities such as Google, Amazon, Ebay and Starbucks have retorted that what they do is totally legal and within the remit of current international tax treaties between the US and the Eurozone. One British parliamentarian who was interviewing these corporate executives in London yesterday went on the record saying; "yes your actions may be legal but they are not moral".

I reckon that as austerity measures continue to bite across Euroland we will see more and more attacks on favorable tax avoidance measures. This trend can only adversely affect the profitability of international corporations operating throughout Europe, bringing with it more uncertainty, instability and risk to corporate financial planning and assessment.

Charts: Courtesy Of StockCharts.com

By Christopher M. Quigley

B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin, Ireland. He holds a Bachelor Degree in Accounting and Management from Trinity College Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the stock market in 1989 in Belmont, California where he lived for 6 years. He has developed the Wealthbuilder investment and trading course over the last two decades as a result of research, study and experience. This system marries fundamental analysis with technical analysis and focuses on momentum, value and pension strategies.

Since 2007 Mr. Quigley has written over 80 articles which have been published on popular web   sites based in California, New York, London and Dublin.

Mr. Quigley is now lives in Dublin, Ireland and Tampa Bay, Florida.

© 2012 Copyright Christopher M. Quigley - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife