T Theory expert goes bearish, projecting bear market in equities to 2013: Terry Laundry's technical analysis

This is an important alert that Terry Laundry, the T Theory expert who had projected the stock market's rise from March 2009 expecting it to continue through August 2010, is now blowing the whistle. He's saying the rise into May (which he also predicted, though thought it was last until May 21) was "it", and now the bear market is ba-a-ack!! Here's his report as posted Sunday, May 23, at his webpage Terry Laundry's T Theory™ Observations: Terry Laundry's Weekly T Theory™ Observations for May 23 2010 at http://www.ttheory.com/. Terry's website is always in my list at the right side of the page here because his analyses are among the most important that we follow.

=============

T Theory Observations for Sunday May 23 2010Today I will discuss my major conclusion that we have entered a new bear market that will likely last until the year 2013.

Introduction to the New BearMarket

Audio Commentary: Download AudioIntroNewBearMkt20100523

The T Theory™ Confidence Indicator Turns Bearish Long Term

This topic updates developments in the Confidence Indicator developed for my T Theory™ using the ratio of the Fidelity High Yield Capital and Income Bond fund to the Vanguard Long Term Treasury Bonds. You can find the details in the post for May 2 2010 at the bottom of this page.

In summary it shows the loss of confidence that is characteristic of a new bear market. My audio commentary is at the link below. A image of the chart is shown below. The key point is that the low quality high yield bond fund is only up 1.4% year to date while the Treasury Bond fund is up 9.6% signally a flight to a quality preference over a higher yield preference.

Audio Commentary:Download TTO20100523ConfidenceIdexTurnsBearish

The Advance-Decline Oscillator not Signaling any Important Low Near Term

My Advance-Decline Oscillator has dropped to an oversold condition that is not consistent with a bull market and has not yet shown the double bottom or rising bottom pattern that signals a sustainable recovery. A better quality PDF chart is provided below.

Audio Commentary:Download AudioADO Bottoms20100523

Download SRTado20100521pdf

The Advance-Decline Line Ts Outlook is Bearish Long Term

The longer term trend of the Advance-decline Line has passed a projected peak in May and is likely to be headed down at it did from the early June 2007 peak. A higher quality PDF file is provided below the chart.

Audio Commentary:Download AudioADTConstruction20100523

Download A-DTConstruction20100520pdf

China Fund Topped Out

Most of the emerging markets are following the China Funds topping process via either a conservative T or full T as illustrated in the chart above.

Audio Commentary:Download AudioChinaFundTs20100523

Summary of Todays Post

Audio Summary: Download AudioSummary20100523

End of this Sunday's T Theory Observations

Each Sunday, unless otherwise noted, I post my observations here by Sunday afternoon. When I post the Charts on Saturday don't email me questions until the full Sunday presentation is finalized.

My mp3 audio files provide the bulk of the commentary. If you have a problem listening to them, or they cut out, experience shows that your computer's audio memory has become saturated. A restart of your computer should clear up the problem.