New stock market crash is coming. New warning sign for a total bear market for all indices.

The July close of the indices came in below the 8 month MA. This is another sign that the bull market might have ended and sideways trading is more likely fore the Dow, SP500 and Dax. The Swed30, IBEX35, MIB and CAC40 are  already in a bear market and here the 8 month MA will turn down on Monday August 1. This means a definite stop for trading above this MA.

The volatility will continue week August 1 and a rally might occur if the U.S. debt ceiling is lifted.

However the big dark clouds will not go away. The U.S. Chicago Fed National Activity Index was in June very close to a new recession. We might already be there now. No debt ceiling lifting will change this very broad measurement with 85 components.  The chart from 2006 shows a very big double top which is broken on downside indicating to me that the same deep recession we had 2008 will occur quite soon. The American wages is below inflation and the outlook for unemployment seem negative. House prices continue to fall and Asia is less keen to buy U.S. debt. The consumer sentiment in the U.S. as well as in Europe is very low and interest rates are going up in Europe including England where BOE has not raised rates. Inflation is increasing all over the world. Many murky outlooks from the July industry reports. Gold is rising sharply indicating inflation is rising and paper money is less attractive.

These facts cannot be changed because of trouble with debt in the U.S. and the Eurozon countries. This accelerating slowdown will run its course and it indicates to me together with the technical outlooks for stocks, bonds, precious metals and the main currencies that we will have a very long recession.

The stock market crash of 2008 did not run its course because the central banks flooded the markets with money to save banks and help consumers. That flooding however did not create jobs. Now all countries are in deep debt so there is no help this time and I think many banks will collapse on bank runs when the downtrend accelerates.

Four indicies now in definitive bear market. One is close but three just in short term downtrend.

01.45 CET

France CAC40, Italy SPMIB, Spain IBEX35 and Sweden SWED30.I are now in definitive bear markets.
The 50 MA has crossed 100 MA and 200 MA on downside and all MA:s have turned down. The bear market can only be reversed if 50 MA turns up and crosses 100 MA which also turns up.

Last time this technical situation was seen was September 27, 2007 for SWED30.

England FTSE is very close to the same situation which I regard as bear market.

U.S.A. Dow and SP500 have both the 50 MA crossed on downside of 100 MA which has not turned down. The 200 MA:s are still rising below the curves. Germany DAX have the long MA:s in order for sideways trend but the daily trend is down since the 8 MA has crossed 21 MA which both will turn down in a few days.

The bear market indices should be sold and long term short positions should be taken on strength.

New crucial week July 25. Markets divided on trend.

14.15 CET


The Greek crisis is solved at least for the next few months and the markets regarded EU:s decision positively. The Euro and the stock markets closed up for the week. Obama has tried with small news a few times during the week to lift the U.S markets higher and the markets seems to believe that the debt ceiling will be lifted soon.

This is now priced in to the rising daily trends. If negative news would appear the markets can fall substantially. It is therefor not possible now to tell what the markets will do week July 25.

However the big stock indices are now divided in three groups technically. The Dow, SP500 and Dax look strongest with only one negative, the weekly 8 MA is below the 21 MA which is a warning sign to be too optimistic on upside. Next group is FTSE, CAC40 which looks less likely to continue on upside and finally the dangerous group, IBEX, MIB and SWED30 which are closer to a bearmarket.

When something serious happens all the indexes will go the same way. With three indices that seems to continue on upside and low downside potential (group 1) and three indices which seems to prepare for a fall (group 3) and two indices that seems to continue sideways (group 2) it is difficult to tell just now where the markets will go the next five trading days. If the picture will clear up technically a new blog will appear immediately.

I am only looking for the big trends that will change the bullmarket which has been in place since March 2009. As soon as there are signs that a bearmarket is coming you will read it here as you did in late 2007 before that bearmarket started.

Traders might want to buy group 1 and short group 3. I myself do not want any position right now.

EU presents a perfect plan to stop speculation about debt crisis and the Euro.

10.45 CET


The EU surprised the market with an excellent plan for Greece, Irland and Portugal. The plan has now been traded on for 2 hours in the U.S., a full session in Asia and more than one hour in Europe. The Euro continues to rally and so does the stock markets which might change the downside to upside or neutral for the indices when the dust has settled.

A thorough analysis will be presented within the next few days on where the stock markets are going now. It is important to get the Wall Streets closes tonight to get a reliable forecast.

Now it is up to America to show the markets that their problem also could be solved.

I have never seen a looming crisis come to such a quick stop. Now we know for sure that EU can be fully trusted next time a crisis comes up. EU have now got a strong leader and strong support from all members that will force the critics to think again. Congratulations Angela Merkel.

Deal regarding European debt problems has been struck.

08.55 CET

After seven hours of talk between Angela Merkel, Nicolas Sarkozy, and the presidents of the European central bank and European Union an agreement has been reached which is a good one according to Angela Merkel according to Market Watch.

The agreement will be presented at todays meeting with the Euro member states. This agreement will most likely be the resolution of the EU as I see it.

Swedish article http://www.dn.se/ekonomi/eurons-vinna-eller-forsvinna#article-readers

Printing money is Europes only way out. Read link

WASHINGTON (MarketWatch) — Italy is wobbling. Spain is facing a fresh crisis. Even France doesn’t look like it is a secure member of the euro zone anymore. The storms swirling around Europe’s beleaguered single currency are growing by the day as the crisis moves in from the periphery into what can only be regarded as core Europe. The markets remain poised on a knife edge, fearful of the consequences of a full scale collapse. http://www.marketwatch.com/story/printing-money-is-europes-only-way-out-2011-07-20

I recommend this exellent story as an overview of what can happen to Europe.

European markets continues on upside on yesterdays rise in the U.S. Angela Merkel is playing down the results the EU can come up with regarding Greece on Thursday July 21.

All stock indices up on Stress Test and Obama news on debt ceiling.

Already at 2 AM Asia lifted the stock markets at the opening and Europe followed. When Europe had closed Obama said on television that a group of seven senators had come up with a new solution for the debt and that Obama found the idea good for continued negotiations. All U.S. indices quickly increased the pace of the uptrend and tonight's close at 10 PM was just below the days trading tops.

In Europe the EU commission wanted a meeting on Thursday to solve the Greece problem. Angela Merkel however said that there was no hurry and that the markets should not expect too much on Thursday.

The short term trend is now up again but there is so far no change in the main trends.

According to Shiller a great depression will start in 2012 and no growth during the next 10 years. Read it.SAN LUIS OBISPO, Calif. (MarketWatch) — A slow-growth decade is already raging. You feel it everywhere. And it’s going to get worse, much worse. A recession is virtually certain for 2012, in an angry, volatile presidential election year. May morph into a 1930’s-style depression. http://www.marketwatch.com/story/5-buys-5-sells-for-10-long-years-of-no-growth-2011-07-19

This week could be crucial for the long term trends of all big stock market indicies.

The stock markets have come to a crucial point right now which might determine the next long term move.
The U.S debt ceiling and the longer term solution for Greece will most likely come to a decision point later this week July 18. Congress need time to make the laws before the deadline August 2. EU finance minister will meet July 21.

The European Bank Stress test has not been defined as good or bad yet so the market has not reacted fully yet. There are so many news this week so it is best to skip all news and follow the charts instad since everything is built in there what the market thinks.

The technical pictures shows the possibility of a sharp drop or a push on upside. The fundamental news triggers will probably show up on the indices 5 minutes charts in advance of the decisions. A U.S. agreement to lift the debt ceiling can come any day of the week and the best way to find it is on the small scale charts. Gold and bondprices plus the EURUSD should be followed 24 hours from now togehter with the stock indices. The big market players use to use market situations like this to push the markets the wrong way for a while so this week is not something to trade for unexperienced traders.

The big indices differ technically right now. Italian, Spanish and Swedish indices are the weakest then comes France and UK.- Dax, Sp500 and Dow looks safer.

The sideways trend has now been in place between four to eight months for the main indexes and still no clear sign where the new trend will go.

There has been a two weeks rally on upside which now seems to have stopped below earlier highs. Since the weekly MA:s still points to a breakout on downside this is my main theory. The monthly MA:s are still up which is a sign that the trend can break on upside. However the monthly charts for IBEX, Swed30 and FTSE will soon see the 8 MA:s go sideways or down. The indexes always moves in the same direction i a new trend. There are lots of other indications that points in the same direction. Here are a few.

The big deficits in the European PIIGS countries will not go away and the Euro countries seems unable to solve the problems. The U.S. deficit and Obamas difficulties to persuade the congress to lift the debt ceiling hangs over the markets. Employment reports all over the world points to slowing growth. House prices are still falling in the U.S. and Spain. Gold is still in a strong uptrend pointing to increased inflation while the central banks refuse to lift interest rates in the U.S and UK.

The sharp downward correction in the bear market 2008 should have continued down like it did in 1929 . The uptrend or bull market that started in March 2009 took of on enormous liquidity injections from central banks and built on continuous injections. What was lacking was new jobs and  falling unemployment. I do believe in a second drop of the market indexes and that we now are seeing the top before that bear market. The difficulty is to find the exact start for that drop and that is what this blog is about. I believe I can find it but it can still take a few months.