Historical share prices for all Royal Dutch Shell plc shares and historical share prices of Shell Transport and Trading and Royal Dutch Petroleum back to 1990. What it could not survive, however, was the additional expense of the War in Iraq; the subsequent skyrocketing of oil prices; and the loss of government revenue resulting from the Bush tax cuts in the face of reduced economic growth. The market began to take-off while the GDP struggled to keep aloft and then fails; housing starts, then housing prices peak followed by a reversal. In April 2008, America, especially those invested in the stock market are looking for any good news, and when they hear it, stock prices soar.
CHART 3, Not coincidentally, housing prices, which had been skyrocketing to historic levels based on nothing but the belief the increases will never stop, also stopped in early 2006; plummeting faster than they rose. CHART 4, Historically, since 1937 anyway, real estate has always been funded by traditional banks, often backed by government sponsored enterprises (GSE) like Freddie Mac. On the one hand, we see the stock market going crazy, along with the home loan industry; billions were being make in the financial industry … but being lost elsewhere (with nobody noticing just yet).
On the other, the GDP is faltering, housing starts and prices have reversed, median family income was going down, the War in Iraq was in trouble as was the War against Terror, and America was becoming isolated from its allies. For example, the stock price crossing above the 50 Day Moving Average for AAPL has a success rate of 70%, but for XOM it is 41%.
Now, there isn’t anybody who could have known at the time, but that local high followed by the local low was the left-shoulder of a Top Head-and-Shoulder formation pattern that is recognized as a rather bad sign in technical stock market analysis. There are 3 signals generated on April 27, 2015: As Markets are open, here are the current prices as of 10 AM Apr 28.
Author’s note – I actually remember when the above statement and Moody’s assurances were put out.. The stock market rose accordingly the next few days until August 6 when word began leaking out that both Countrywide and Moody’s were rethinking their position. However, because this happened so close in time to the market high, technicians will be looking for a confirmation, although they will now be taking precautionary steps to exit the stock market should things start to go south.