The Market Ticker
Commentary on The Capital Markets- Category [Market Musings]

Someone may be fibbing.......

Allegedly Amazon is posting up ~26% annual sales growth in North America, including most-particularly the United States.

However, the most-recent retail sales report says that all "non-store retailers" saw 7.5% sales growth on an annualized basis.

You need to square these two; the "common explanation" is that Amazon is destroying all the other online businesses.

Is that true?

Well, it had better be... because if it isn't then there's a big problem brewing for companies that claim huge sales growth but you can't find the sales in the government's retail sales report.

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A couple of points to consider....

First, technically the market is broken.  Friday was a classic break out of a triangle to the downside and Monday was a classic kissback to the bottom of it that failed.

Tuesday did what is expected after that -- a big sell-off.

Just simply on that pattern a decline of the length of the flagstaff, which projects to the low-to-mid 1600s on the S&P 500, is expected.

That, I remind you, would basically erase all of the gains since 2007.

The -61.8% of the recent decline and recovery targets 1712, so somewhere in there would be a decent first level expectation for the short (next few months) period of time.

But that leads to another set of problems, because if we get there and fail to hold we then have a target down closer to 1200 over the next six to twelve months.

That would be close to a 50% loss in the indices from the highs.

Likely?  Dunno.  But if you're one of those folks who think you're real smart this is something to consider -- especially given that there is really very little other than easy money machinations (cheap borrowing funding buybacks and similar) that has been responsible for the rally since 2009.

Could we take it all back off -- or at least down to the mid-2011 year levels?

You bet.

How do your projections for your personal financial situation look if that happens, and how will you feel about those in the "investing industry" that almost-certainly up to this point have not told you to get out, nor will they.

One final point -- the worst sort of decline is the grind down rather than an outright crash.  It is very hard to sell into those when you are hearing everyone telling you to "buy the dips", especially when that has worked for more than half a decade.

History usually doesn't repeat but it often does rhyme.

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