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> Dr. Joe Duarte's Market I.Q., by Dr. Joe Duarte
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post Jun 14 2011, 01:23 PM
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June 13, 2011, 08:00 EST Dr. Joe Duarte's Market I.Q.


The Internet's Intelligence Digest
Intelligence, Market Timing, And Trading Strategy For Traders and Investors


U.S. Stocks At The Crossroads
What's Hot Today:
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U.S. stocks are very close to making a major break to the down side.

Today's Economic Calendar

News For Thought

Surprises found in Michigan bus company's cargo bays. According to the New York Daily News: "A Michigan tour bus company was ordered to cease operations after six people were found traveling in one bus' luggage compartment. Along with the uncomfortable travelers, authorities also found mattresses, pillows and luggage when the bus was pulled over in Ohio on May 27th." The bus driver told investigators that he had "run out of room" in the passenger compartment.

Carcinogens in everyday life. According to The New York Times: "Government scientists listed formaldehyde as a carcinogen, and said it is found in worrisome quantities in plywood, particle board, mortuaries and hair salons. They also said that styrene, which is used in boats, bathtubs and in disposable foam plastic cups and plates, may cause cancer but is generally found in such low levels in consumer products that risks are low." The bigger worries are for those in manufacturing facilities with high and frequent exposures to the chemicals, the report added.

U.S. Stocks At The Crossroads
One Or Two More Sloppy Days Could Lead To Significant Selling

There are many who still believe that this won't be a significant correction. Yet, the technical aspects of this market suggest that there is a significant amount of selling going on.



Chart Courtesy of StockCharts.com


The S & P 500 is just a few points above its 200-day moving average. And this could be an area where the bulls come back and try to get this market to bottom. It could also get taken out in a hurry, leading the market to fall another 3-5% in a hurry. That's how important this chart point is for the market.



Chart Courtesy of StockCharts.com


And despite the S & P's weakness, the broad market looks worse. The Nasdaq Advance-Decline line (NAAD) made a new low at the end of last week.


That means that the average, rank and file stock is weaker than the S & P 500 at the moment. And that means that those portfolio managers that got caught off guard by the last six weeks of selling may now have to re-evaluate their positions.



Chart Courtesy of StockCharts.com


The recent leadership in the market has also taken a beating. For example the Oil Service Index (OSX) has fallen steadily for several weeks. Support is nearby at 250 and the 200-day line. Below that things could get dicey.



Chart Courtesy of StockCharts.com


Even safe havens such as the drug stocks (DRG) are starting to take a beating making this an increasingly dangerous market.

Conclusion

The market is clearly in correction mode. Whether this is a run of the mill 10-15% decline from the recent top or something worse, of course, remains to be seen.

The key may well be whether the S & P 500 can hold above the 200-day line and whether the rest of the market can recover. Still, it could well be one to three weeks or longer before any kind of sustained up trend can take place, barring an all out V type reversal.


Important Notice To Subscribers

The Nasdaq's watchdog was recently found guilty of insider trading. That's just another example of the state of our society as the pillars continue to break down. Moral weakness and the lack of integrity are the norm in many arenas, not the exception.

That's because we are living through a period of seismic change. Indeed, we are in the midst of something big, as a major macro trend change is gathering steam. We are experiencing the end of one era and the start of another. These are momentous times.

Corruption is being exposed at all levels on a regular basis. Fraud is everywhere. Nothing is what it seems to be. And those in charge, politicians, CEOs, and regulators are all part of the problem.

The world is entering a critical period similar to other important transitions in history, such as The French Revolution, the fall of the Berlin Wall, and the periods that preceded the World Wars. Prepare yourself for what lies ahead. To read more about the evolution of the Social Cycle, the central force of today's world, and to get a grip on real CHANGE that lies ahead, read "The New Golden Age". Visit our bookstore.

 



Market Moves
Caterpillar's (NYSE: CAT) Could Be Signaling A Major Macro Trend Change

Shares of Caterpillar (NYSE: CAT) have been falling of late raising questions about whether the U.S. Dollar can remain weak and whether China's economy is about to slow down considerably.



Chart Courtesy of StockCharts.com


Caterpillar has been making money from two things in the last few years, China's boom and the weak dollar. If those two things end, things may be different for CAT, given the steadily slowing U.S. economy.

Thus, if the market is a predictor of the future, CAT may be trying to tell investors something; the global economy is about to slow down. And the reason the dollar's rise, even though it may be temporary, could be a signal that investors are starting to fret about the potential issues that may be brewing for the emerging markets.

CAT is all about construction, especially outside the U.S. This could well be a significant turning point, if the action in the stock turns out to be an accurate predictor of the global economy.






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  • Market IQ reports may not be redistributed without permission.

  • Joe-Duarte.com is independently operated and solely funded by subscriber fees. This web site and the content provided is meant for educational purposes only and is not a solicitation to buy or sell any securities or investments. All sources of information are believed to be accurate, or as otherwise stated. Dr. Duarte and the publishers, partners, and staff of Joe-Duarte.com have no financial interest in any of the sources used. For independent investment advice consult your financial advisor. The analysis and conclusions reached on Joe-Duarte.com are the sole property of Dr. Joe Duarte.



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