SPX update

The price action of yesterday is about to finalize the top as we have not been able to close above the TDST line by producing a minor reversal. Ideally we need to close lower on Friday and have a neutral or weaker close on a weekly basis which is 866 or lower. Markets have not priced in the Pandemic effect so far and heading for the weekend it might occur today. After all the news is not good at all so far earnings in the USA are down 35% and in Europe 42%. This rally is purely technical and by no means what ever some morons out their may want you to believe based on a fundamental upturn – keep that in mind all along the way. I wrote months ago we would have this rally and it be only temporary. The scaring thing its even not over yet as we will have a wave C up as well in summer but after that we will get a devastating down move to new lows. True lows are made at discount levels – that’s single digit earnings around 8 times. Currently we trade 18 times earnings and part of those earnings are some phony components . One of which is banks accounting in many ways with some taxpayer presents baked in. The second component are the pension profit allowances which overstate many big companies earnings by 10% on a yearly basis for at least 10 years. So do not get confused by the hype we are still in the early stage of this big contraction called depression.


~ by behindthematrix on May 1, 2009.

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