High level market overview [UVXY]

The markets are at an incredible state of confusion right now.  The major headline indices are near all time highs while very significant indices such has Dow Jones Transports lag badly.




Likewise, many big name individual stocks beneath the major indices are falling out of the sky.  Look at, for example, WMT and now M.  Look at Wall St darling PCLN down 9.57% today.  Retail is in shambles. Well folks for an economy which (ridiculously I might add) measures its "GDP" as having a component which is 65%-70% of its makeup called "consumption", plummeting retail sector cannot be a good sign.  Even AutoZone broke down its top rail today and is back in the channel.



Today in the US economy everything is measured not in terms of economic need but rather in terms of confidence.  Nobody's starving.  There are 3 TVs in every home along with computers, cars and all kinds of other signs of prosperity.  Of course, most people ignore the 19 trillion dollar national debt and the nearly as ridiculous ~12 trillion in consumer debt which has paid for all these nice things.  That debt was nothing more than borrowing from the future and a period of austerity of some type WILL be the result.  Period.  If that does not occur then we will have gotten something for nothing and that is an economic impossibility.  Even taking things via war is not an economic "nothing" in terms of effort, manpower losses, etc.  War also carries risk that you might lose and then what you actually lose could end up being far more than you were even planning on winning by the act.

I do not think that the market is done selling off yet because UVXY hasn't yet made a lower low.  In fact, fear is threatening to put in an inclining double bottom.  My stops are set at a fairly loose $25.60 on this but if FXI begins to sell off again like I think it will then I don't think I will be taken out.