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[Chris G]

Alan M. Newman's Stock Market CROSSCURRENTS
Alan M. Newman, Editor
September 17, 2013
Excerpts from our current issue

Rationales & Targets

We have yet to see the high volume necessary for a substantial corrective wave to unfold. Stocks remain primarily and almost exclusively driven by mechanical factors, chiefly high frequency trading. Despite the rally last week, the bulls are still losing control one foot at a time. There is not enough interest or liquidity at this time for money managers to commit big time to stocks. With mutual fund cash remaining at extremely low levels and margin debt in the stratosphere, the current environment is as dangerous as any this observer has ever seen. The August 28th Dow mini correction low of 14,760 seems far less important than the June 24th low of 14,551, the level at which we would expect the downside to accelerate. We are convinced a major top is brewing. Although we changed our “strong support” opinion to Dow 12,471 in the June 24th issue, the worst case scenario of a smash to Dow 10,404 is still possible. The only good news is we don’t think there is any way the March 2009 lows will ever be taken out.

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