Stock Market Needs a New Battery Says Market Timer Frank Kollar

March 6, 2009 (FinancialWire) (By Frank Kollar)

Last week we wrote that the stock market had been critically injured. This week it appears to be on life support. The S&P 500 Index (SPX) has lost over 24% in the last two months alone!

Have you ever tried to start a car with a dead battery? Have you tried recharging the battery, only to find that it won’t hold the charge and after maybe one start, it fails again? That is the stock market.

There is no reason for buyers to step up to the plate. The stimulus and spending bills, the huge amounts of money being poured into our failing banks and corporations, and now the money to be spent trying to keep delinquent homeowners in their homes, none of it is working.

Oh sure, someday the economy will turn around and the markets will rally. They always do (I think). But no one can see any light at the end of this tunnel, so no one is investing, while more and more investors are pulling more and more funds out of the financial markets.

Since President Obama was elected the stock market has lost some 30%. This is not an investor’s revolt against a new Democratic president’s policies. This is millions of investors making decisions with their very non-political wallets. And they are leaving in droves.

A new battery is needed. Not a recharge into an old battery like the administration is currently doing. Investors need something that will hold a charge, and that means ending the props for failing companies and homeowners and stating, unequivocally, that the government will print and borrow no more money.

That’s it. Finis. The end.

Then we will see a new market advance and eventually an economic recovery based on the one asset this country has that never gives up. Its people; workers, investors and entrepreneurs. It would be painful for awhile, but isn’t it painful already?

Do we expect the administration to do this? No.

And eventually, even without the help of our government, the economy will recover.

It always does…right?

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

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