lost thursday, page-9

for the monthly XJO tick chart...

the slow stoch (15/5 SMAs) has recently gone short from about the 40 level. in 18 years of data for the XJO, this is the only occasion this oscillator has turned down before first reaching 70 plus.

so what is likely to happen next?

looking at the XSO monthly tick chart...

in late 2000, the oscillator turn down from 40. it then bottomed in the oversold area in late 2001. currently the XSO slow stoch has turned down from a recent oscillator peak at 35 and is now at 30.

really, this market has to do more bottom testing before it goes anywhere.

in an era of low inflation and low growth, bonds and cash are the asset class of choice.

there won't be a real bull market in equities, unless there is an increase in credit and leverage, and that is not going to happen whilst we are in an era of overindebtedness and deleveraging and everyone trying to pay down debt.

the demographic group with the wealth in this country is the baby boomers. we own the property and the equities. clearly, economic trends are conspiring to redistribute some of abundance of wealth away from us. witness the asset deflation in property and equity values over the last five years.

the squeeze is on. many will lack the skill to maintain their relative level of wealth.

let's not kid ourselves. it's going to be an uphill battle for most to maintain their wealth, let alone make more.