Friday, July 21, 2006

US Consumer

The Transports are down 33 points, this on top of Thursday's breathtaking plunge of 204 points. That makes a total of 237 Transport points lost in less than 24 hours.

The Transports represent sales, merchandise being moved, coal being moved to utilities, steel being carried to construction sites, activity, activity and more activity.

The plunging transports are telling us that America is slowing down, movement is hitting a brick wall, sales are slowing, and in the all-important housing area, sales have "dropped dead."

Technical note -- Yesterday, Lowry's Stock Buying Power Index sank to another multi-year low, indicating that demand for stocks was continuing to decline.

The US consumer is strapped for cash, and it's showing in the action of the stock market. The KEY could be the housing industry, which quite frankly, is falling on its face. First, housing sales slump, second, home prices and condo prices break. We're right on the edge of the second.

This is a nasty, sneaky market. For instance, have you seen anyone anywhere mentioning the Transport collapse?
There's a lot of damage being done, but nobody seems worried. There's just no urge to buy stocks from the big guys. The way things are going, this nation could be in a recession before anybody knows what's happening.

I'm convinced that the squeeze is on the consumer, and I'm convinced that the housing market is on the edge of a swoon. We should know whether I'm right in about a month or so.


Post a Comment

<< Home