Global Show Of Force

Despite a concerted effort of the central banks around the world to lower interest rates on Wednesday, the markets popped and then dropped with Dow losing 189 points. The current losing streak has now been 6 days, and some of the major indexes are having their worst percentage loss this century.

Here’s what the Fed said:

Incoming economic data suggest that the pace of economic activity has slowed markedly in recent months,” the Fed said in a statement. “Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.”

No kidding; what took so long to figure that one out?

Here’s another worthy quote by a British research firm:

The action “suggests that the authorities are now fully awake to the scale of the financial crisis in the markets,” said Douglas McWilliams, chief executive of the London-based Center for Economics and Business Research.

[emphasis added]

I sure hope that all authorities are now fully aware of the depth of the crisis, which many of us have been reading and posting about on the internet since last year. However, being aware and being able to do something about it are two entirely different things.

In my view, no concerted effort will stop the trend that is currently in place. It has to play itself out and, eventually, we will see a rebound of some sort. At first, most likely, it will be a dead cat bounce, which eventually could turn into a new major uptrend.

I don’t think we’re even close, and my Trend Tracking Indexes (TTIs) confirm the severity of the current bear market. The domestic TTI has dropped an amazing -13.13% below its long-term trend line while the international TTI sits -22.97% below its dividing line between bullish and bearish territory.

Cash is King!