The title of an old Pacific Gas and Electric song seems fitting at this phase of the U.S. stock market. It stills looks to me that January is setting up to be a major turning point in not only the U.S. stock market but in the U.S. government’s self-appointed role as the CEO (Chief Executive Officer) of the world and all it thinks it entails. The problem with that role is that most other countries of the world did not willingly sign up to be pawns for the U.S. government to use and abuse as it sees fit. Many of these countries have co-aligned to cooperate in a new financial network that will bypass the use of the U.S. dollar in the not too distant future. This new financial network will not turn on to full volume until the U.S. dollar shows obvious signs of self-destructing, along with a little help from some of its creditors. This financial self-destruction is due to its exponentially rising debt (courtesy of the world’s largest paper money printing press (Federal Reserve) due to having the world’s primary reserve currency) which is directly tied to its unbridled spending habits that first and foremost support the U.S. military-industrial complex’s (this includes the CIA and the intelligence agencies) addiction to ruling the world which includes in no small measure the spreading of war and chaos around the world. This effort also includes suppression and control of the domestic population through efforts such as the creation of Department of Homeland Security, Transportation Security Administration, militarization of the local police departments, the Patriot Act/authorized spying on the domestic population, climate engineering, and last but certainly not least financial engineering (which includes making people debt slaves). This is all for the benefit of the relative few at the top of the ruling hierarchy which includes the Military-Industrial Complex, big banks, big corporations and the rest of the Deep State (the unelected portion of big government that has the power and knowledge of how to rig the game in their and their cronies favor) at the expense of the general population. The politicians are a side show to make the people think they have real representation in the government but mostly they tacitly promise the before-mentioned true powers to not get in their way and then they are free to game the system any way they please.
On to the markets. The leadership of the U.S. stock market is exceedingly thin now and a past market darling such as Apple is not close to making new highs. Apple has the largest market capitalization of any U.S. stock by far. Its average volume per month has not touched its 50 month average volume since April, 2013 and the trend of its average monthly volume is steadily decreasing demonstrating a lack of liquidity and demand. It has already fallen hard this month on increasing volume as compared to last month’s volume and the month is not over yet. Apple also showed significant relative weakness last week as compared to the broader indices that it is a constituent of, such as the Dow Jones Industrials, S&P 500, Nasdaq 100, and Nasdaq Composite. When the market’s largest stock by capitalization that has also been one of the market stalwarts during this almost seven year bull market shows obvious signs of weakness in an already thin market then it is time to seriously think about heading for the exits if not already out. Apple looks headed back to its late August low of 92 (it is now at $108.03) and due to the lack of volume/liquidity, it probably will not take long to get there.
I think it is starting to look likely that the major indices (S&P 500, NDX 100, NASDAQ Composite, and Dow Jones Industrials) will make a marginal new high in the first half of January. I do not think this new high will last long as economic fundamentals are steadily deteriorating both domestically and globally and the U.S. stock market is extremely overvalued at this point. I then think you will start to see a change in leadership towards selected emerging markets (Russia, Brazil, China), energy, and agriculture related stocks and away from past winners that are supporting the major indices. The solar energy sector looks like it has already bottomed and started up. First Solar (FSLR) made a 52 week high on Thursday and Sunpower (SPWR) continued up last week after an explosive move the week before. The solar sector ETF, TAN looks good here as well. Also, the Dow Jones Transports are trading at 19 month lows and are nowhere close to revisiting their November 2014 highs leading to a Dow Theory non-confirmation of any new highs by other major indices, which means sell the indices making the recent high.
Precious metals look like they are getting ready to continue their downtrend after trading in a range for the last 6-7 weeks that has digested its previous move down. 1000 and then 957 or so appear to be the next downside targets for gold. Then I think it is likely for gold to break support at these levels and then continue further down to 800 or less. When gold gets down to these last levels, then it is practically game over for U.S. government hegemony. I expect gold and silver to make explosives moves off their bottoms that will signal the end of the almighty U.S. dollar which is the only thing underpinning the power of the U.S. government. This phase will end the ability of the U.S. government and their central bank to print seemingly endless amounts of paper money without any repercussions. At that point the U.S. government will be on the precipice if not over the cliff of actually being broke with little ability or recourse to fix things. As a guidepost, you might look to this happening around May 2016 since the move down to these levels will probably take some time. Final moves down in a market (such as precious metals) often happen quickly so do not expect this U.S. rigged game to last much longer.