Market's at a critical juncture -- really

http://cbs.marketwatch.com/news/story.asp?guid=%7BB46883A7%2DC419%2D42D4%2DA4DF%2DD2C4E2B1AE6C%7D&siteid=mktw

Whether we are considering the span of our individual lives or the grand sweep of human history, we always tell ourselves that our fates lie crucially in the balance of what is happening right now.

A year from now, of course, we'll be saying the same thing about what's happening then, having forgotten what we said today.

So you have every right to be skeptical when I tell you that the stock market appears to be at a particularly crucial juncture right now.

But it nevertheless appears to be true. A number of newsletter editors who are not otherwise known for hyperbole have drawn attention in recent sessions to rare phenomena that could be either very bullish or extremely bearish.

Consider the stock market's advance-decline data for Tuesday, April 13. On that day, there were more than 2,500 more declining stocks on the New York Stock Exchange than there were advancers.

That turns out to be a record, according to the trio of editors at Wall Street Winners (Elliott Gue, Ivan Martchev and Yiannis Mostrous). According to them, there have been only two other occasions in which the plurality of decliners over advancers on the NYSE came anywhere close to April 13's number.

The first was the day before the Oct. 9, 2002, bottom of the 2000-2002 bear market, when there were 2,371 more decliners than advancers.

The second was the day the stock market reopened after the September 11 terrorist attacks, when there were 2,218 more decliners than advancers.

...more...

I usually don't link to CBSNews.com economic editorials, but this
one caught my attention. Something BIG is definitely about to happen
and that is what has been written about for MONTHS over at
financialsense.com These CBS "gurus" are just now catching on....

...but I just don't get the point of this article. It says something big is gonna happen...could be bad, could be good. I'm not a market analyst and I could have concluded that. Am I missing something?

Twice or three times a year now we reach such critical junctures it seems. That in the nature of our current financial market dominated economy. Every time so far when it reaches the brink there is a stick save.

This guy doesn't mention the critical thing now occuring. The rise in long term interest rates. This rise has one obvioius and one non obvious consequense. The obvious one is that mortgages and soon other consumer rates will rise and tend to stifle demand. The non obvious thing is that the sharp rise of recent weeks is putting stuependous pressure on the opaqe world of interst rate derivatives.

It is quite possible that the 22 year long falling trend in interest rates is over. This has been the tailwind which has defined, if not caused the mania for financial assets, ie. stocks, bonds and the myriad arcane debt instruments which have proliferated. Many companies 'earnings' are dominated by finance. 50% of GE's earings are finance based. For GM it is 70%. Every CFO in America must be agressive in the debt market or lose their job, risk be damned.

Of course Greenspan assures us there is no risk. Would he lie?

Anyway, getting back to the long term interest rate trend. If rates are set to begin a years long rising trend then the financial world will be facing a headwind. Greenspan will move heaven and earth to keep rates from spiking up from here. Or if he is smart he will retire. He must let on soon if he is willing to serve another term for Bush must reappoint him soon.