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davejh23 (< 20)

Second Worst Monthly Decline After Just 1 Week

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August 08, 2011 – Comments (0)

Looking back over the past 20 years, only October 2008 has had a larger monthly decline.  Of course, the market could turn higher here and reverse much of the damage done over the last week, but it could also keep tanking and give us the worst month ever.  Unless we get a sharp rally soon, the 20 week average on the S&P will soon cross below the 50 week average...a pretty reliable crash indicator.  The 5 and 13 month averages on the monthly chart can be looked at as well...there are very few false triggers, and none when stocks have fallen this far below the averages.  On the daily chart, the death cross on the S&P is just days away...some criticize this indicator as it gave two false triggers before the real deal in Dec. '07 and a false signal last Summer as well.  However, it's never given a false signal with stocks falling this far below the 200 day (currently ~13%).  Absent extreme Fed intervention, it looks like we might have a good bit more downside.

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