Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Trade Wars Guarantee An End To The Stock Market Party

Stock-Markets / Stocks Bear Market Sep 28, 2009 - 02:01 PM GMT

By: Captain_Hook

Stock-Markets

Best Financial Markets Analysis ArticleOn one side of the formula we have the continued need for speed in monetary creation by whatever means, capably characterized by Doug Noland in his weekly commentary explaining that while it will all end badly, government largesse will likely get out of control before its all over. The point he is getting at here is that because of all it’s meddling, the government (and us) is locked in an inflation death grip it necessarily needs to keep building on or face implosion. So in essence, Doug is alluding to the risk of hyperinflation, or the closest we will ever come to it on a macro-scale. And he is perfectly correct in this accounting of our dire circumstances, and the eventual disastrous effects of all this government intervention to keep the bailout finance bubble growing. One day this thing is going to pop, like all bubbles do, and it will be game over for the global economy, US Dollar ($) hegemony, runaway socialism, and unchecked fiat currency regimes.


The following is an excerpt from commentary that originally appeared at Treasure Chests for the benefit of subscribers on Tuesday, September 15th, 2009.

And as per our discussion last week, enter Robert Prechter and his thinking that in spite the need for speed discussed above, the bureaucracy will fail in its attempts to keep inflating with abandon because the consumer is about to cave in, scuttling any such attempts, predicated on the concept the larger Elliott and Kondratiev wave patterns are suggestive deflation should grip the macro sooner than later. And this sentiment is also being touted as a timely matter by Harry Dent right now as well, adding considerable weight to this call, because he sees the two big D’s coming into play – those being deleveraging and demographics. So the question then arises, which camp is right – the deflation or inflation camp? Let’s take a look at this question to see if we cannot arrive at an appropriate answer within the increasingly complicated tapestry of our economies.

For me, it’s all about deleveraging, where demographic trends will work to exacerbate the credit contraction trend into the future. Based on this belief, you might have guessed that I sit in the deflation camp as far as this being the primary condition of the larger economy, however one would need to be living in a vacuum not to notice the largesse (inflation) the bureaucracy has and continues to let loose, so you see there are dual paradigms that exist at the same time, with the latter designed to counter the former. In the end however, which for our purposes is fast approaching in a cyclical sense if the deflationists are correct, one paradigm will consume the other and become the obvious winner, with inflation’s reign under the Keynesian influence most likely to finally succumb to gravity. We know this to be true because sectors that are not benefiting from monetization practices are seeing price weakness already, and the rest will follow when foreigners finally cut our drunken bureaucracy off of cheap credit.

Even without this things don’t look good in the credit markets, where we have another mortgage debt implosion scheduled for next year already, one where unless accelerated monetization and low interest rates are maintained, the bureaucracy will be unable to keep real estate loans from joining all other sources of credit contraction, locking in a deflationary spiral the likes of which has never been witnessed in human history previously in either scale or scope. And who knows, the larger sequence could be starting right now formally with an apparent trade war between the US and China brewing. Is this why China is bringing its gold reserves back home for safekeeping, along with implementing a partial gold standard to protect its economy? If you need to think long about the answer to that question you are not doing enough reading, where this issue should be taken very seriously by all because no matter where you live or what you do.

Escalating trade wars would likely end globalization as we know it much as the Smoot Hawley Tariff Act of 1930 did the same over the next decade on a smaller scale. You had a spend happy democrat in the White House back then, and we have another one today consistently making history again, where igniting a trade war to guarantee a decade of Depression was all that was missing from the silhouette. And now, that piece of the puzzle has fallen into place too, all in good timing to trigger Chinese reprisals across a variety of markets they influence, with debt and precious metals topping the list undoubtedly. All they need to do is cut back further on US debt purchases and push gold comfortably over the $1,000 mark to send a message to Washington that they ‘must be high’, not that the drug addicts (they are hooked on printing money and feel invincible) in the bureaucracy would notice.

Be that as it may, if something like this were to occur in coming weeks concurrent to the seasonal inversion in stocks topping out in extreme timing territory (October / November), we would have the fundamentals to match the larger degree cycle turns (think Elliott and Kondratiev waves) in place, painting a scary picture for equities in 2010. You will remember this is Prechter’s call, that next year would go down in the record books in the deflationary event department based on the Grand Supercycle wave structure in stock markets around the world. And based on the way things are developing this fall to set the trends in motion, it appears the dominos are all falling right on schedule. Even the September quadruple witching in the futures markets is helping the cause in this regard in that put / call ratios are high enough to aid price managers in continuing the low volume squeeze in stocks, with the trend about to be tested apparently. (See Figure 1)

Figure 1


There is no more significant test of the trend than the155-exponential moving average (EMA) on the monthly, the ultimate ‘trend definer’ in being the optimum Fibonacci derivative that has proven reliable in measuring profound directional changes. And as you can see above, the S&P 500 (SPX) is set to test the trend at 1070, where a break above this key resistance level would put stocks back into hyper-bubble mode. (I will discuss this further below as well.) In knowing how the psychology of markets work however, one would know such an outcome is not likely on an extended basis because once broken, bubbles of this scale do not return normally, which has been the experience throughout the ages. (i.e. think the South Sea Bubble, etc.) The Nikki is a good modern day example of this, and is likely leading US / global stocks in this regard, where it will probably never see the 1989 highs ever again.

The world’s stock markets are simply more complicated these days, but not less profound in the sense bubbles associated with the last Grand Supercycle top in equities was also global in scale, albeit participation levels within the general population have never reached such extremes before. Even the peasants of third world countries have gotten involved in the present day mania, suggestive the hangover will be long lasting and profound even if reorganizations of new fiat currency based economies were possible, which of course is likely not the case. Once confidence and cooperation are lost on this scale it does not come back for generations, not without some new earth-breaking technology to formulate new economies anchored in geometric efficiency gains. (i.e. think the wheel, steam power, the microchip, etc.)

So, the next time the SPX falls through the 233-month EMA, as denoted above, you will know a high probability exists a Grand Supercycle Degree event in stocks could be unfolding, suggestive stocks could plunge to unimaginable levels to most. And you will see this same sentiment as it pertains to the SPX seen above denoted below with respect to the Dow, along with a target crash zone we should all hope holds. Because if the Dow cannot hold the 3,000 to 4,000-crash zone, then we could witness a 90% plus retrace, potentially involving a complete breakdown in modern day society. To hold this support zone with gold able to rally into the same numeric (a Dow / Gold Ratio of unity) would be a sign that new currency regimes involving partial gold backing would likely be formulated and define exchange in trade for a period of time. Again however, this does not mean the global stock markets will ever return to previous highs. (See Figure 2)

Figure 2


Unfortunately we cannot carry on past this point, as the remainder of this analysis is reserved for our subscribers. Of course if the above is the kind of analysis you are looking for this is easily remedied by visiting our continually improved web site to discover more about how our service can help you in not only this regard, but also in achieving your financial goals. For your information, our newly reconstructed site includes such improvements as automated subscriptions, improvements to trend identifying / professionally annotated charts, to the more detailed quote pages exclusively designed for independent investors who like to stay on top of things. Here, in addition to improving our advisory service, our aim is to also provide a resource center, one where you have access to well presented 'key' information concerning the markets we cover.

And if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line. We very much enjoy hearing from you on these matters.

Good investing all.

By Captain Hook

http://www.treasurechestsinfo.com/

Treasure Chests is a market timing service specializing in value-based position trading in the precious metals and equity markets with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at Treasure Chests

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2009 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

Captain Hook Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules