With the cyclical bull now 42 months old, and today the tired old bovine began to show its age. Sure, after April 15th the market may muster may catch it痴 breath for one more attempt to the upside, but today's early action was a classic case of "suck'em in, and sell'em off".
I never have been a fan of perma-bear advisors, but from time to time even perma-bears will eventually be right, Case in point if Martin Weiss, editor of the "Safe Money Report".
I have been beating the drum about the real estate bubble for some time now, and Weiss' Safe Money Report recently stated that "The Housing Boom of 2005 is turning into the housing bust of 2006".
You do not have to be an expert to figure these things out. All you have to do is pay attention to things happening around you. Like the NASDAQ bubble of 2000, you couldn't find anyone around who wasn't bragging about the fortune's they were making in tech stocks. When you walked through the business section of a Barnes & Noble, all you saw were get rich books on day trading and the stock market.
Today is no different. A few months ago, investors were bragging about the appreciated value of their homes, and the bookstore shelves are packed with get rich ideas about real estate. These are all obvious signs of a bubble. Those who tend to ignore the signs are usually wrapped up in the hype surrounding the obvious.
The Safe Money Report said, 典hat listings on Realtor.com have tripled since June. Sellers are growing desperate, and prices are beginning to decline. The nationwide inventory of unsold existing homes is the worst in 18 years, and the backlogs of new empty condos are piling up like dead birds in a pandemic. The inventories of homes are up 15 times more than sales".
Here along the Gulf Coast, investors are fleeing in fear of another terrible hurricane season. The MLS listings in our area are up almost five fold from a year ago.
So, if we can all see the warning signs of an economic slowdown, why can't Wall Street? Don't be fooled, their vision is fine, and latter this year they will let you know how they really feel.
As for today, the market could not hold on to a 138 point rally that peaked before noon. Once again, the metals and commodity stocks were the biggest gainers. Copper prices hit another record high. What痴 odd is the metallic value of 5-10 one cent pennies may actually be worth more in metallic terms than the value of one metal in a quarter. Go figure. Also, Gold prices continued to march higher and hit a 25 year high.
Despite the obvious signs, I think the market has enough B-12 left in its system for one more attempt to a euphoric ending. As I have stated before, we will probably see 1350-1400 on the S&P before the market reverts back to its bearish cyclical pattern.
