Just as it was in 2008, WalMart is the last stock to roll over; now in free fall... Today, they announced a disappointing revenue forecast. When people can no longer afford the cheap junk sold at WalMart, then you know the Ponzi is unwinding...
[Original Post: November 14th, 2012]
All of the bearish newsletters and blogs I follow are debating whether or not we crossed the rubicon today. I am firmly in the "yes" camp, but I will let the charts do the talking. Of course all of the mainstream finance related sites remain firmly oblivious, and on the money shows everyone is still talking about which are the best stocks to buy at this juncture. The most interesting analysis is from the Elliot Wave types who see this as a "third of a third" event meaning a third wave down at all degrees of trend. If that is the case, and we should know soon enough, then this indeed is the point of no return. The reason we can't say definitively that we have crossed the rubicon, is because obviously Wall Street remains firmly oblivious at this juncture. When they wake up to the fact that the next 1000+ Dow points are down v.s. up, then it will be front page news. Suffice to say, the level of complacency at this juncture is the biggest reason to be bearish, because it means everyone is still buying the dip and therefore there is plenty of scope for panic when they realize that everyone is on the same side of the boat...
The U.S. stock market (S&P 500): (Chart Below). Now well below the trend line on rising volume.
The VIX (options fear gauge, below): Above the trend-line but still coiling - no fear here - yet
Walmart: Ultimate Ponzi Stock: Breaking down big time
Junk Bonds: Rolling Over on Heavy Volume - the First Sign of Credit Contagion
What about Gold You Say? The yellow metal is holding up for now, but I am still ultra bearish, especially given that the dollar hasn't started rallying yet.
Usually the gold miners lead the metal itself, here they are getting monkey hammered today:
As always, I recommend short-term U.S. Treasury Bonds. For those who think it's crazy to buy any bond now, I already addressed that issue here.
INVEST AT YOUR OWN RISK
