Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Understanding the Gravity of Current Stock Market Crisis Condition..

Stock-Markets / Global Stock Markets Jul 16, 2008 - 11:05 AM GMT

By: Marty_Chenard

Stock-Markets

Best Financial Markets Analysis ArticleMany investors don't look at the long term picture of what is happening.  I am talking about looking at
10 to 20 year periods of time.  If you looked that far out on a number of key stocks and indexes, you would understand the gravity of the current condition we are in.

This morning, we will look at 6 long term charts that will give you a clearer picture of the incredible damage that has occurred to our financial structure and economy.  As you will see in the last paragraphs, there is also an important message behind today's analysis.


The first chart we will look at is a 10 year chart of the Banking Index.  There is no other way to describe it other than a crash on the Banking Index.  The Index is now far below any levels seen since 1998.

The next two charts show what has happened to Fannie Mae and Freddie Mac.  Together, they hold over 50% of all the mortgages in the United States. 

Freddie and Fannie have been the under pinning structure of our mortgage industry.  Both of these stocks and institutions have crashed to levels not seen in 18 years.  The gravity of the situation is very serious and a challenge that Bernanke and Paulson either don't understand, or don't know how to solve.

It used to be said that, "As the automotive industry goes, so goes the country".  That was said in the days when we were still a manufacturing country.  Then in recent years, Greenspan consistently stated that we were shifting from a manufacturing economy to a service economy.  In other words, we were shifting all our manufacturing jobs overseas.

General Motors is still an important facet of our economy, only their stock has crashed as well, and GM is now in some very serious trouble.  As of yesterday, its stock was lowest value it has seen in decades.

This one is not a surprise ... everyone knows what has happened to the home building industry.

Still, not many are cognizant of the fact that Hovnanian has dropped from $70+/share to $4.95 as of yesterday.

And our last chart is on China's Shanghai Composite Index.  Everyone seems to have the idea that China is booming and that everything is rosy.

Once again, China's stock market has not been a picnic.  Their stock market is no different looking than our internet bubble that crashed.  This chart shows its amazing spike up from 2006 to 2007.

The beginning of 2008 exhibited a downside failure on the Shanghai with a drop that is now reminiscent of our internet bubble and housing industry fall.  See the next paragraph for today's message ...

Why am I posting all these gloom and doom charts?

The answer is because I am getting many emails from Free Members who are consistently looking for a great buy at a perceived bottom ... every time some stock or index goes lower.  Everyone seems to have thrown away the old piece of paper that said, "Don't try to catch a falling knife". 

When I started StockTiming.com, preservation of capital was one of the key mission statements for subscribers. Like many others, I am one of the Baby Boomers just over 60 years old.  (Okay ... 61 to be exact!)  For Baby Boomers, preservation of capital is very critical because we have fewer working years ahead of us compared to the younger generations.  It means that aggressive behavior like trying to catch a falling knife has no place in one's investment strategy. 

If you ever ran a race when you were younger, you huffed and puffed for some time afterwards trying to catch your breath ... before you could resume walking or running again.  The stock market is not much different ... only that "huffing and puffing" is what is called consolidation or "base building" after a large drop.  Please ... give up the concept that "bargain stocks" are a good buy when their movements have been nothing but unabated down trends.  When they reverse their trends to the upside, there will be plenty of time to shop around.

By Marty Chenard
http://www.stocktiming.com/

Please Note: We do not issue Buy or Sell timing recommendations on these Free daily update pages . I hope you understand, that in fairness, our Buy/Sell recommendations and advanced market Models are only available to our paid subscribers on a password required basis. Membership information

Marty Chenard is the Author and Teacher of two Seminar Courses on "Advanced Technical Analysis Investing", Mr. Chenard has been investing for over 30 years. In 2001 when the NASDAQ dropped 24.5%, his personal investment performance for the year was a gain of 57.428%. He is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools.  As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL.  He is an advanced technical analyst and not an investment advisor, nor a securities broker.

Marty Chenard Archive

© 2005-2022 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