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ERROR: type should be string, got "https://www.wsj.com/articles/SB124702543552710177\nMiracle Gro for Green Shoots?\nRandall W. Forsyth\nJuly 8, 2009 12:01 am ET\nNOT ALWAYS DO THE FUNDAMENTALS and technicals line up quite so conveniently.\nAmid growing evidence that the so-called green shoots of growth spotted in the spring are quickly withering in the summer heat, calls are being heard for a second round of fiscal stimulus.\nAt the same time, the stock market also looks as if it is wilting in the July sun. On the charts, the indices have reached some ominous price points and patterns.\nTaken separately, the fundamentals might be ambiguous. Things have stopped heading to hell in a hand basket, but they hardly are improving. And the stock market might be due for a correction after its 30% surge in the past few months, even if the economy were sitting on the launch pad.\nBut taken together, the fundamentals and technicals paint a consistent picture of growth falling short of the optimism embodied in the notion of green shoots.\nThe Standard & Poor's 500's decline of 2% Tuesday, or 17.69 points to 881.03, put the average right on its 200-day moving average, which is a widely watched measure of the market's medium-term trend. Recently, the S&P's 50-day moving average moved above the 200-day MA, a move called a \"golden cross\" by technicians. Translation: the short-term upward momentum had overcome the intermediate-term downward trend.\nBut, as Barrons.com's technical maven, Michael Kahn, detailed last week, this indicator is far from infallible (\"Will Stocks Turn to Gold,\" July 1) And, indeed, this time it appears to be a case of fool's gold.\nAnother widely watched technical formation also appears to be breaking down -- the dreaded head-and-shoulders. That describes a market that hits a peak (the left shoulder), pulls back but rallies to a higher peak (the head), falls back and then rises to a third peak (right shoulder) that is lower than the head. When the stock falls below the \"neckline\" formed by the lows on either side of the \"head,\" it's a negative signal.\nAccording to Bespoke Investment Group, the S&P broke below the neckline of a head-and-shoulders formation going back to April. Based on chartist lore, a head-and-shoulders formation should give way to a drop equal from the neckline equal to the distance from the head to the neckline. That would point to a drop to about 828 on the S&P 500, or 6%, according to B.I.G.\nI'm agnostic about precise predictions from the charts, but the moving averages and the head-and-shoulders pattern both portray stock prices that are no longer rising.\nThis impression that things aren't getting better was underscored by the June employment data reported last Thursday, which broke the trend of \"less-bad\" job losses. But the 467,000 decline in payrolls understates the state of the labor market.\nAccording to the TrimTabs' Weekly Macro Analysis based on tax revenues, \"declines in wages and salaries are accelerating.\" Wages were down 5.8% in June from a year earlier, a worsening from the 4.8% year-on-year drop in May, after adjusting for the \"Making Work Pay\" tax credit.\nGiven these doleful trends, calls are beginning to be heard for a second round of fiscal stimulus to follow the $787 billion package that the Obama Administration got through Congress in short order in February. White House Economic Adviser Laura Tyson said that mightn't be enough given that economy was worse than the Obama team realized when it took office, echoing a statement made earlier by Vice President Joe Biden.\nIt's astounding that anyone, let alone a trained economist, would expect that a fiscal stimulus package passed just before spring training would turn around the economy by the mid-point of the baseball season. Remember \"long and variable lags\" that accompany government policies' impacts? And much of the Obama plan doesn't take effect until 2010.\nWhat's being called for is the equivalent of Miracle Gro for the green shoots of economic growth. For those unfamiliar with the stuff, it's like steroids for plants. If only it were as simple to pour Miracle Gro on the economy.\nRichard Russell, writing in his Dow Theory Letters, contends that \"the great primary trend of the stock market continues to be bearish.\" That suggests the lows have not been seen.\n\"I don't think most analysts understand the amazing power and tenacity of the great primary trend of the market,\" he continues. \"Most people believe that if the government or the Fed does this or that, the bear market can be halted or reversed. Nothing could be further from the truth.\"\nWhich means that March's lows are likely to be broken, followed by \"a much lower bear market,\" Russell says. To which he adds, apologetically: \"Sorry, those are my deepest and most truthful thoughts.\"\nThat contrasts with the green-shoots crowd, the most vociferous of the bunch get on television and crow the recession is over. Meanwhile, jobs and incomes continue to decline. The bear market won't be over until these loudmouths also are unemployed.\nComments: randall.forsyth@barrons.com"