Editor’s Note: Ken Safian has been providing detailed analysis of the markets and the economy for decades and his work provides an example of the application of the principles of technical analysis to economic data. This is a brief extract of a recent report that highlights this type of research and some background on the firm.

Flow of Funds – 3rd Quarter 2011

Since 2008 we have been referring to this economic period as a “new era”, yet investors and analysts do not seem to be revising their thinking and models sufficiently to reflect this situation. Undoubtedly, most have adjusted their way of viewing interest rate conditions due to Federal Reserve actions, but their measures of valuation, economic conditions and patterns of the consumer have not changed that much in the majority of cases. Certainly, the hedge fund industry has changed because of the difficulties and illegalities in this sector, but there

A webcast presentation was conducted by John Kosar, CMT on December 14th, 2011 as part of the MTA’s Educational Web Series. This webcast can be access by visiting: http://go.mta.org/194 

John makes precise and often accurate market forecasts. He began his presentation by reminding the audience about a forecast he had made during at an MTA presentation on August 3. At that time, John noted, “July breakdowns in European equities led this week’s breakdown in the US, which targets another 8% decline in the US broad market before its larger May decline (with some assistance from the US economy) may be completed. Although extremes in some near term breadth statistics suggest the potential for a minor rebound first, perhaps over the next week or so, relative underperformance by the PHLX Semiconductor Index and a bearish nonconfirmation according to Dow Theory (among other indicators) suggest that the May decline in the US stock