The chart shows the Russell 3000 Index in black charted along with the percent of its components above the 200 day moving average. This chart like many others being published this week show that the averages are being carried higher by only a small number of stocks.
In other times this would be a harbinger of a serious decline in the immediate future. It is still a very bad sign but we must remember that there is a politically untouchable system of organized support pushing the market higher. Odinary investors have only money they have earned to trade with. That money is theirs to lose. Gains and losses don’t concern central banks. Don’t think for a moment that all central banks are not buying outright with money that is virtually imagined into existance
That doesn’t render indicators useless. It does make it impossible to make a meaningful forecast with respect to timing. Back in the early fall, I cautioned readers to discount the possibility of an October selloff. The same bearish indicators were present at that time. The market is not going to crash here unless the Federal Reserve is completely taken by surprise with a sudden swamp of supply. Odds of that happening is slim. The vast majority in the U.S. still completely trust government and are completely clueless about what Federal Reserve policy has to do with stock prices.
Remember that Wall Street and international banks have hired government to make and keep them profitable. Of course this is a huge disadvantage to average Americans who are completely unaware that there is a problem.
I am still 78% in cash. The big deal here is protecting assets even if it means foregoing any return at all in the interem. The only thing relevent to predicting a crash is determining when the American public will wake up and discover they are being robbed.
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