Stock Market Leading Indicators:
All Showing Major WeaknessMar 12, 2008 - 04:14 AM Market Oracle
By: Donald_W_Dony
Great easy to read charts in this article.....
Bottom line: Leading indicators of the U.S. equity markets are moving in concert lower. These indicators normally lead the stock market by 6-12 months. As there is no technical evidence of any long-term trend reversals or even finding solid price support, this would suggest additional downward pressure can be expected for the equity markets in 2008. This action coordinates with the topping of the 2006-2010 business cycle. The peak in the cycle is associated with rising unemployment, weakening earnings and Fed reduction in interest rates.
Investment approach: As the crest in the 4 year stock and business cycles have developed approximately mid-term, the likelihood of another 1-2 years of down trending equity markets is large. Commodities are one of the few investments that remain in a secular bull market. As the Fed will continue to cut interest rates over the 1-2 years, the USD will drift lower which will escalate inflationary pressures and drive raw material prices higher. ETFs are an excellent vehicle to capture the commodity rise. Gold, oil, agriculture and natural gas will all take advantage of the declining US dollar.
Additional research can be found in the March newsletter. Go to www.technicalspeculator.com and click on member login.
Your comments are alway welcomed.
By Donald W. Dony, FCSI, MFTA
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