Remember
Abigail Doolittle’s prediction of a coming financial collapse I posted 2-weeks
ago? She warned of a “50%-correction”
and then she said,“…the cause of the financial collapse, and probably the cause
of what is likely to be a coming recession as well, based on these charts,
(is)…GDP growth - it's in a descending trend channel.”
Here’s
a chart from Contrary Investor (link below) that illustrates her point; GDP growth
peaked in 1979. (Frankly, this is the
most depressing chart I have ever seen; it shows lower highs and lower lows in
GDP growth since then.)
Perhaps
it’s not a coincidence that the GDP growth peaked about the time when the US debt
began to rise precipitously, and unjustifiably since there was no national
crisis as had been the case in prior years (see National Debt chart below). As we have borrowed more to support our
spending, we have produced less. The above
GDP chart may also (or instead) reflect our balance of trade since the US has
manufactured less, but we have continued to consume. I am not an economist so I will let you draw
the conclusions.
Federal Debt chart from: http://www.usgovernmentspending.com/federal_debt_chart.html
The
S&P 500 has been trying to crack the old interim high of 1364 set on 29
April 2011
The
S&P 500 closed today at 1368, up just 2-points. VIX was up 5% to 18.2.
While
the S&P 500 did break its old interim high, we need to see the S&P
higher still to be fully convinced. If
the S&P can get a couple percent above the 1364 level, it might pave the way for
further significant gains. (Back to the
1560 level is my guess, but it is only a guess.
There is nothing in the NTSM system that predicts the future – it analyses
the market at each day’s close.)
Today,
Monday, the NTSM analysis at the close remains BUY.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 100% long in
the long-term portfolio (100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page).
Just a reminder: 100% invested in stocks is way too much for most rational folks. Don’t do it unless you have a high tolerance for risk.
