We are RIGHT NOW in one of those moments when the markets have accepted the realization of reality and is in the process of “pricing it in”.

Each year the first half of the year shows an economic slowdown. Markets sell off to reflect. Then Central Banks pump the cash in time for the Holiday Season and markets rally into the New Year.

Lather, rinse, repeat for the past four years. We are doing the same thing again with a notable exception. How many times do I have to say that this is 2011 all over again?

Yesterday the FED said that there’d be no new QE for now. That is because they have spend trillions training the market that they will be there with Digimoney when needed for the criminal banks and the status quo investor. Because of this strict training, the major indices have not dropped at all, and remain positive for the year, regardless of the shitstorm almost everywhere.

The market won’t drop because they’ll do QE but they won’t do QE unless the market drops (but nobody really believes them). Checkmate.

But economically sensitive individual sectors are being drawn and quartered. First it was materials, then consumer discretionary and now technology. All of these sectors have been market leadership in the past.

It feels as if the markets are stuck in the mud and going nowhere, but we have actually begun a new downtrend that could take us to Dow 11200. And if it happens in October, you’ll have a new President.