"Set aside the situation in China, where data released Tuesday showed manufacturing activity dropped last month to a three-year low and reached contractionary territory — the given reason for Tuesday’s market tumble. Forget for a moment about the Federal Reserve, which seems committed to raising interest rates this
month for the first time since 2006. The stock market itself is warning of big trouble.
Collectively representing the opinions of countless individual participants, it pays to pay attention to what is the greatest future discounting mechanism in human history.
The technical damage to stock prices has been severe. The S&P 500 has suffered its first "Death Cross" — a plunge of the 50-day moving average below the 200-day moving average, a sign of lost medium-term momentum — in four years. The long-term trend is at risk, as the index closed Monday’s session below its 12-month moving average, a strong predictor of bear markets.
Unless stocks mount a historic charge higher here — ending September 6 percent higher — it could be game over for the bull market. History isn't on their side.
The kicker is that the decline we've already seen in stocks is setting off alarm bells in the macroeconomic models created by Wall Street trading desks. Bank of America Merrill Lynch Economist Michael Hanson's model puts the probability of recession at nearly 50 percent based on the 15 percent annualized drop in stocks over the last six months." msn
Collectively representing the opinions of countless individual participants, it pays to pay attention to what is the greatest future discounting mechanism in human history.
The technical damage to stock prices has been severe. The S&P 500 has suffered its first "Death Cross" — a plunge of the 50-day moving average below the 200-day moving average, a sign of lost medium-term momentum — in four years. The long-term trend is at risk, as the index closed Monday’s session below its 12-month moving average, a strong predictor of bear markets.
Unless stocks mount a historic charge higher here — ending September 6 percent higher — it could be game over for the bull market. History isn't on their side.
The kicker is that the decline we've already seen in stocks is setting off alarm bells in the macroeconomic models created by Wall Street trading desks. Bank of America Merrill Lynch Economist Michael Hanson's model puts the probability of recession at nearly 50 percent based on the 15 percent annualized drop in stocks over the last six months." msn
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