MARKETS STRUGGLE WORLDWIDE WITH CLOSURE OF GREEK BANKS

Dow Industrials are in a trading range between 18,300 and 17,700

Since February, the Dow industrial Averages have been trading between a narrow trading range of  18,300 and 17,700. Does this SIDEWAYS TREND mean that the Dow is no longer a bull market? Is this what stock market chartists call DISTRIBUTION??? Although the NASDAQ has made new highs, the Dow Transports and Dow Utilities are definitely in a downtrend. According to the Dow Theory, this is a sell signal. If you want to know what’s really going  on in the US markets, take a look at the US Treasuries. Today at 2.48% the 10 year yield is up 3.55% for the day and up over 20% this year. I would think, that’s where the smart money is going, even though the yields are low. For many, it’s better to receive a small yield, than be in a dangerous stock market.

ISL JUNE 22

All that I said below is being negated by a supposed new deal with Greece.        (DAX up 3.8% Ya Ya!) If a deal is made, it is just postponing the enviable, in my opinion, which is a Greek default. The Bull market has run out of gas and is now being pushed, by hand, up a very steep hill. It reminds me of the Greek myth ‘SISYPHUS” that was charged with roiling a bolder up a hill. The higher he got, the bigger the boulder became. THE 10 YR T-bond yield is up 10 basis points. That tells the real story. Watch out below!

ISL  June 19 2015

BULL MARKET OVER FOR DAX, FTSE,CHINA, DOW TRANSPORTS/Utility AND BOND MARKET! AT THE SAME TIME THE NASDAQ MAKES NEW HIGHS. WHO IS OUT OF SYNC?

The Chinese markets are down 12% this week. The DAX is down from  a high of 12,375 to 11,062. The FTSE is down from a high of 7,104 to 6,728.The Dow Transports are down from a high of 9,217 to 8,479.The Dow Utilities are down from a high of 652 to 575. The 10 year yields have risen some 20%. All this while the  NASDAQ hits new highs. Somebody is out of sync?

Robert Prechter of the famed Elliott Wave Forecasting has just said that he believes the stock market is in a high risk of a sharp collapse. As an example he looks at the Dow on February 27 when the Dow hitting new high, there were 172 New York Stock Exchange listed stocks that achieved a new high and 31 stocks that hit new lows. However, when the Dow rose to his latest record high on May 19, the number of new highs had fallen to 118, while new lows rose to 38. In addition, he points out something that I did in our last letter, which is that the Dow Jones Transportation index and the Dow Jones Utility index are in downtrends. This is a traditional Dow Theory, sell signal. Prechter also said that the market is operating in a 6.25 years to 7 year cycle that has been operating since 1980 which calls for a market decline. The Elliott wave is based on a Fibonacci summation series known as the divine, or golden ratio which is been found to exist throughout nature including outer space. (See my book above entitled the Investment Strategy Handbook for Volatile Markets.)

I believe that the Bull Markets of the above-mentioned indexes HAVE ENDED. IN MY OPINION THE INTERMEDIATE TREND OF THESE INDEXES IS NOW DOWN. However, the Dow industrials, the NASDAQ and the Standard & Poor’s 500 continue in a narrow trading range in what technical chart readers may call Distribution. One of the main topics of contention is, when will the Federal Reserve increase interest rates and will Greece meet its financial obligations? According to Diane Swank of Mesrow Financial, she believes short-term rates are headed up and in September. This is much earlier than the market investors are contemplating. As far as the Greece situation is concerned, we have been consistently negative and believe that all alternatives are just kicking the can down the road to Greece’s inevitable default. How long will the major indexes hold up in their current Bull Market? There’s an old saying, “it isn’t an over, until it’s over.”

Maybe, you haven’t heard the news yet, but the bond market is crashing. Yields on the 10 year bond are up .55 basis points. That corresponds to approximately a 20% increase in yields for the 10 year bond. Maybe the Federal Reserve isn’t ready to increase interest rates, but investors sure are.

The fabric of the economy continues to be ripped apart by events that hurt the Middle Class and the poor. Pew Research have 30 States cutting budgets in health care, senior care, city government and universities, At the same time wages are dropping and upward mobility is suffering. Add to this, is a recent decision by the Supreme Court to not protect individuals who have second mortgages in bankruptcy. Meanwhile Jamie Dimon becomes a billionaire.  IF THE SUPREME COURT RULES AGAINST OBAMA CARE, THE POOR WILL RECEIVE ANOTHER BLOW.  HOW MUCH MORE PUNISHMENT CAN OUR CONSUMER ORIENTED ECONOMY TAKE? Watch out below!

KEEP AN EYE ON THE CHART BELOW FOR BREAK OUT POINTS BELOW RESISTANCE OR ABOVE SUPPORT AREAS. Particularly  watch for a breakout below Dow 17,700 AND THEN 17,147/17,000, NASDAQ 4605/4545, S&P 500   1991/1973. That would change the Intermediate trend to DOWN

Dow Industrials are in a trading range between 18,300 and 17,700

Since February, the Dow industrial Averages have been trading between a narrow trading range of  18,300 and 17,700. Does this SIDEWAYS TREND mean that the Dow is no longer a bull market? Is this what stock market chartists call DISTRIBUTION??? Although the NASDAQ has made new highs, the Dow Transports and Dow Utilities are definitely in a downtrend. According to the Dow Theory, this is a sell signal. If you want to know what’s really going  on in the US markets, take a look at the US Treasuries. Today at 2.48% the 10 year yield is up 3.55% for the day and up over 20% this year. I would think, that’s where the smart money is going, even though the yields are low. For many, it’s better to receive a small yield, than be in a dangerous stock market.

ISL JUNE 22

All that I said below is being negated by a supposed new deal with Greece.        (DAX up 3.8% Ya Ya!) If a deal is made, it is just postponing the enviable, in my opinion, which is a Greek default. The Bull market has run out of gas and is now being pushed, by hand, up a very steep hill. It reminds me of the Greek myth ‘SISYPHUS” that was charged with roiling a bolder up a hill. The higher he got, the bigger the boulder became. THE 10 YR T-bond yield is up 10 basis points. That tells the real story. Watch out below!

ISL  June 19 2015

BULL MARKET OVER FOR DAX, FTSE,CHINA, DOW TRANSPORTS/Utility AND BOND MARKET! AT THE SAME TIME THE NASDAQ MAKES NEW HIGHS. WHO IS OUT OF SYNC?

The Chinese markets are down 12% this week. The DAX is down from  a high of 12,375 to 11,062. The FTSE is down from a high of 7,104 to 6,728.The Dow Transports are down from a high of 9,217 to 8,479.The Dow Utilities are down from a high of 652 to 575. The 10 year yields have risen some 20%. All this while the  NASDAQ hits new highs. Somebody is out of sync?

Robert Prechter of the famed Elliott Wave Forecasting has just said that he believes the stock market is in a high risk of a sharp collapse. As an example he looks at the Dow on February 27 when the Dow hitting new high, there were 172 New York Stock Exchange listed stocks that achieved a new high and 31 stocks that hit new lows. However, when the Dow rose to his latest record high on May 19, the number of new highs had fallen to 118, while new lows rose to 38. In addition, he points out something that I did in our last letter, which is that the Dow Jones Transportation index and the Dow Jones Utility index are in downtrends. This is a traditional Dow Theory, sell signal. Prechter also said that the market is operating in a 6.25 years to 7 year cycle that has been operating since 1980 which calls for a market decline. The Elliott wave is based on a Fibonacci summation series known as the divine, or golden ratio which is been found to exist throughout nature including outer space. (See my book above entitled the Investment Strategy Handbook for Volatile Markets.)

I believe that the Bull Markets of the above-mentioned indexes HAVE ENDED. IN MY OPINION THE INTERMEDIATE TREND OF THESE INDEXES IS NOW DOWN. However, the Dow industrials, the NASDAQ and the Standard & Poor’s 500 continue in a narrow trading range in what technical chart readers may call Distribution. One of the main topics of contention is, when will the Federal Reserve increase interest rates and will Greece meet its financial obligations? According to Diane Swank of Mesrow Financial, she believes short-term rates are headed up and in September. This is much earlier than the market investors are contemplating. As far as the Greece situation is concerned, we have been consistently negative and believe that all alternatives are just kicking the can down the road to Greece’s inevitable default. How long will the major indexes hold up in their current Bull Market? There’s an old saying, “it isn’t an over, until it’s over.”

Maybe, you haven’t heard the news yet, but the bond market is crashing. Yields on the 10 year bond are up .55 basis points. That corresponds to approximately a 20% increase in yields for the 10 year bond. Maybe the Federal Reserve isn’t ready to increase interest rates, but investors sure are.

The fabric of the economy continues to be ripped apart by events that hurt the Middle Class and the poor. Pew Research have 30 States cutting budgets in health care, senior care, city government and universities, At the same time wages are dropping and upward mobility is suffering. Add to this, is a recent decision by the Supreme Court to not protect individuals who have second mortgages in bankruptcy. Meanwhile Jamie Dimon becomes a billionaire.  IF THE SUPREME COURT RULES AGAINST OBAMA CARE, THE POOR WILL RECEIVE ANOTHER BLOW.  HOW MUCH MORE PUNISHMENT CAN OUR CONSUMER ORIENTED ECONOMY TAKE? Watch out below!

KEEP AN EYE ON THE CHART BELOW FOR BREAK OUT POINTS BELOW RESISTANCE OR ABOVE SUPPORT AREAS. Particularly  watch for a breakout below Dow 17,700 AND THEN 17,147/17,000, NASDAQ 4605/4545, S&P 500   1991/1973. That would change the Intermediate trend to DOWN

BOND MARKET CRASHES

Maybe, you haven’t heard the news yet, but the bond market is crashing. Yields on the 10 year bond are up .75 basis points. That corresponds to approximately a 30% increase in yields for the 10 year bond. Maybe the Federal Reserve isn’t ready to increase interest rates, but investors sure are.

The fabric of the economy continues to be ripped apart by events that hurt the Middle Class and the poor. Pew Research have 30 States cutting budgets in health care, senior care, city government and universities, At the same time wages are dropping and upward mobility is suffering. Add to this, is a recent decision by the Supreme Court to not protect individuals who have second mortgages in bankruptcy. Meanwhile Jammie Damon becomes a billionaire.  Watch out below!

KEEP AN EYE ON THE CHART BELOW FOR BREAK OUT POINTS BELOW RESISTANCE OR ABOVE SUPPORT AREAS. Particularly  watch for a breakout below Dow 17,147/17,000, NASDAQ 4605/4545, S&P 500   1991/1973. That would change the Intermediate trend to DOWN

YIELDS UP/ Bonds down

Today, bond yields broke out on the upside, or another way of saying it; bond prices broke out on the downside. This is very significant, as stock traders HAVE been guessing for months, when this readjustment would start. Stocks held up rather well, considering the action in the bond market.

Equity Loss

The working poor got another jab in the mouth today, as the US Supreme Court ruled that homeowners can’t get rid of 2^nd mortgages by filing bankruptcies.

Because second mortgages are based entirely on the amount of equity you possess in your home, taking out a second mortgage causes you to lose that equity. In the event that your home’s value decreases, this leaves you stuck owing more money on your home than the house is worth. If your financial situation changes and you find yourself unable to pay your primary mortgage payment and your second mortgage payment, you’re unlikely to sell the home for enough money to cover both mortgages.

As reported in the Wall Street Journal:

In a win for banks, the U.S.’s top court Monday ruled that underwater homeowners can’t get rid of a second mortgage by filing for bankruptcy protection.All nine Supreme Court justices agreed that filing for chapter 7 bankruptcy protection doesn’t give homeowners the power to cancel a second mortgage when their properties aren’t even worth the value of the first mortgage.

The case involved two Florida homeowners who tried to cancel their second mortgages from Bank of America, arguing that because a second mortgage gets paid after the first, it is essentially worthless. Lenders, however, fought to keep the second mortgage liens, arguing that the debt could someday be fully paid once property values rise.

In Monday’s opinion, Justice Clarence Thomas said the court’s decision took into consideration “the constantly shifting” value of real estate.

“Sometimes a dollar’s difference will have a significant impact on bankruptcy proceedings,” he wrote in the nine-page decision.

Consumer advocates said the ruling will make it harder for bankrupt homeowners to get a fresh start.“Some consumers may be forced to catch up on thousands of dollars of [payments] or lose their homes,” said Carol Colliersmith, an Atlanta bankruptcy lawyer.Bank of America declined to comment Monday on the ruling. But the bank’s lawyers had argued that the dispute “may be the single most important unresolved issue in consumer bankruptcy.”

The 11th U.S. Circuit Court of Appeals upheld bankruptcy court decisions that stripped Bank of America of its liens. The bank appealed.The dispute pitted homeowners, who saw property values plummet during the housing crisis, against mortgage lenders and their allies. Lending groups, including the Loan Syndications and Trading Association and American Bankers Association, backed Bank of America.

The AARP Inc. fought for loan cancellation, saying in a brief that it is “far more difficult for older people to bounce back from enormous financial setbacks” like bankruptcy or medical problems.”Monday’s opinion clarifies the rules for bankruptcy judges who have disagreed on this issue. In 1992, Supreme Court justices determined that a bankrupt homeowner doesn’t have the power to cancel the lien on an underwater first mortgage, but it is less clear what power a bank with an underwater second mortgage has in bankruptcy.

Second mortgages were far less common at the time of the U.S. bankruptcy code’s last major overhaul in 1978.Amid the confusion, some consumer experts argued that despite the sticking power of a lender’s lien after bankruptcy, bankruptcy should also give struggling homeowners a way to fix their housing-related financial problems.

Last year, more than 700,000 individuals and couples filed for chapter 7 bankruptcy, the most popular type of consumer bankruptcy, which enables a court-appointed trustee to sell a person’s property to repay debts and then cancel the rest.Manhattan bankruptcy lawyer William Waldner said he still sees people who are underwater on both their first and second mortgages.

“I don’t think we have as big of a housing recovery as we think,” Mr. Waldner said.

About 2.1 million underwater homeowners had second liens at the end of the second quarter of 2014, said lawyers for Bank of America, citing a CoreLogic report.

KEEP AN EYE ON THE CHART BELOW FOR BREAK OUT POINTS BELOW RESISTANCE OR ABOVE SUPPORT AREAS. Particularly  watch for a breakout below Dow 17,147/17,000, NASDAQ 4605/4545, S&P 500   1991/1973. That would change the Intermediate trend to DOWN