Tag: support

16 YEARS & STILL IN THE RED

Do you think CNBC will be telling you the inflation adjusted Dow is DOWN 1.2% from where it was 16 years ago? Do you think they will be telling you it has broken support and is headed significantly lower? Do you think CNBC or any of the corporate media will tell you the truth?


Chart of the Day

The Dow is currently trading 12% below its May 19th all-time record high. For some perspective, today’s chart illustrates the inflation-adjusted Dow since 1900 — there are several points of interest. Take for example an unlucky buy-and-hold investor that invested in the Dow right at the dot-com peak of December 1999. A decade and a half later, the inflation-adjusted Dow is actually down 1.2%. That is not altogether an impressive performance considering that nearly 16 years have passed. On the other hand, take the investor who bought right at the end of the financial crisis. The inflation-adjusted Dow is up a significant 100% from its financial crisis lows — not bad for a for a six and a half year investment. More recently, the inflation-adjusted Dow has broken below support of a trend that has existed since the end of the financial crisis induced bear market.


CALLING ALL TECHNICAL ANALYSTS

I personally think technical stock analysis is bullshit. But there are millions of people who believe this voodoo stock analysis. Well weenies, it sure looks like the Dow has broken below long-term support. Doesn’t that mean sell? This is where these supposed technicians will come up with some new bullshit reason why this should be ignored. I never tire of seeing “experts” create new storylines to sell their propaganda bullshit in order to rationalize why they are wrong. Everyone looks smart in an unrelenting bull market. The morons and shills are revealed when the bear starts to growl.

 

The Dow has struggled so far in 2014 – down 6.8% year to date. For some perspective, today’s chart illustrates the overall trend of the stock market (as measured by the Dow) since 2003. As today’s chart illustrates, the Dow has benefited from a strong upward trend since early 2009 (see upward sloping green trendline). This year, however, the Dow has sold off sharply due to concerns over steep declines in emerging markets.The Dow’s steep decline has been significant enough to result in a break below long-standing support (upward sloping green trendline).

Chart of the Day