Bobby,thanks for the response. The news from Japan, HongKong, China and Russia keeps getting worse. Company earnings are hurting and the global banking system is not in good health.
Domestic savings have reached a new low, thus making the system dangerously dependent on foreign capital at a time of record trade deficits. Foreigners have been big buyers of US stocks, and if they stop because of stock market fears, trouble.
Global problems will take a longer time to solve, therefore I feel this decline may be of the longer nature. The existence of a H&S pattern in transport index carries more weight than a breaking of an upward trendline.
I don't have money supply data, M-2. Hopefully no significant decline in its rate of growth (not absolute numbers necessarily) has occurred. Otherwise a recession alert may exist. Back in 1929, the Great Depression did not begin with the Crash, but started when the money supply starting shrinking in 1930. I use M-2 because it is more important then M-1 in predicting economic growth.
I believe in Corporate America, but since a global economy with its interdependence exists, world events will affect the US economy.
Hopefully this decline will not be too serious, nor long.
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