What are the markets and economic indicators telling us?
Many market watchers have been calling for economic weakness for well over a year now. Based on experience, it is important to wait for the market to confirm any forecast (positive or negative) rather than try to guess or time when the current trend may change. As an example, many money managers have missed substantial gains in the last 18 months while they based their allocations solely on opinions or forecasts while ignoring the current market trend. The NASDAQ still tends to lead other markets higher and it also tends to lead the way on the downside. The NASDAQ may now be confirming that the economy is headed for a serious soft patch or even a recession. After the dot.com bust, which began in March of 2000, the NASDAQ finally found a bottom in October of 2002. Since that time, the trend has been up. Based on recent declines, the uptrend may now be broken, which is a signal to prepare for possible further declines in all the major averages. The broken trend in the NASDAQ is easy to s
