Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
FREETRADE Want to LEND My Shares to Short Sellers! - 8th Aug 22
Stock Market Unclosed Gap - 8th Aug 22
The End Game for Silver Shenanigans... - 8th Aug 22er
WARNING Corsair MP600 NVME2 M2 SSD Are Prone to Failure Can Prevent Systems From Booting - 8th Aug 22
Elliott Waves: Your "Rhyme & Reason" to Mainstream Stock Market Opinions - 6th Aug 22
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! - 6th Aug 22
Recession Is Good for Gold, but a Crisis Would Be Even Better - 5th Aug 22
Stock Market Rallying On Slowly Thinning Air - 5th Aug 22
Stock Market Trend Pattren 2022 Forecast Current State - 4th Aug 22
Should We Be Prepared For An Aggressive U.S. Fed In The Future? - 4th Aug 22
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? - 4th Aug 22
Stock Market Another Upswing Attempt - 4th Aug 22
What is our Real Economic and Financial Prognosis? - 4th Aug 22
The REAL Stocks Bear Market of 2022 - 3rd Aug 22
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ - 3rd Aug 22
Don’t Be Misled by Gold’s Recent Upswing - 3rd Aug 22
Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse" - 31st July 22
Gold Stocks’ Rally Autumn 2022 - 31st July 22
US Fed Is Battling Excess Global Capital – Which Is Creating Inflation - 31st July 22
What it's like at a Stocks Bear Market Bottom - 29th July 22
How to lock in a Guaranteed 9.6% return from Uncle Sam With I Bonds - 29th July 22
All You Need to Know About the Increase in Building Insurance Premiums for Flats - 29th July 22
The Challenges on the Horizon for UK Landlords - 29th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22
The Psychology of Investing in a Stocks Bear Market - 26th July 22
Claiming and Calculating The Research and Development Tax Credit - 26th July 22
Stock Market Bearish Test - 26th July 22
Social Media Tips and Writing an Effective Call to Action - 26th July 22
Has Rishi Sunak Succeeded in Buying His Way Into No 10 - Fake Tory Leadership Contest - 26th July 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Financial Markets Waiting to Change Direction?

Stock-Markets / Financial Markets 2009 Oct 25, 2009 - 08:14 AM GMT

By: Nadeem_Walayat


Best Financial Markets Analysis ArticleBritain's Great Depression caught the mainstream commentators and academic economists off guard (again), as the UK economy failed to grow by 0.2% in the third quarter as widely expected but rather contracted by another 0.4%. However the trend remains inline with my analysis and forecast of February 2009 that called for a low in the third quarter of 2009 followed by a small increase in GDP for the fourth quarter of 2009.

July's analysis (Engineering a Strong UK Economic Recovery into a May 2010 General Election ) suggested that a lower starting base for the economy sets up for a stronger statistical economic recovery into a May 2010 General Election as 1st quarter 2010 data is released during late April 2010 and revised yet higher during May 2010. That an unemployment starting to converge towards my lower unemployment target of 2.60 million by April 2010 rather than the 3.2 million mainstream view that will likely be revised lower in the coming months.

The bankster's that caused the Economic Pearl Harbour have been completely and utterly let off the hook by inept, incompetent mainstream politicians that are still more interested in seeking to maximise the amount they can defraud tax payers of in expenses, the price for which is being paid in Britain by the rise of the far-right which has risen in support from 3% of the electorate to about 8% today. During the week the far-right were given airtime on the BBC flagship political debate programme Question Time. Britains Great Double Dip Depression ensures the next few years are going to be tough both economically and socially as governments fight to prevent the OTC Derivatives Pyramid from Imploding into Financial Armageddon.

Financial Markets

The Dow, Gold, U.S. Dollar and Crude Oil all ended little changed on the week.

The Dow has given a strong performance from the March bear market lows confounding relentless bearish commentary that saw every dip as the start of THE CRASH!, and Gold which remains hinged to the outcome of the U.S. Dollar that still clings on by its finger nails to the earlier bull market scenario, though which implies an inter market relationship that says a higher dollar 'should' result in gold and stock market weakness, as ever timing will be in the detail especially as Octobers stock market correction was much weaker than expected, about half that which was required to correct the preceding advance to the 9,750 target which has not put the subsequent break above 10,000 on a particularly strong footing, therefore I remain skeptical of the current phase of the stocks bull market rally being sustainable, more on this on in depth analysis in the coming days.

Trading Lesson - Forecasting and Trading

Over time one learns the important difference between forecasting, which is scenario building and trading, which is reacting to price movements in real time. Why forecast ?

There is the incentive to stay attuned with the market mentally because the act of trading is not intellectually stimulating it is more akin to repetitive action akin to a martial art or sport where practice rules supreme, whereas forecasting is intellectually stimulating and aimed at giving insight into the mega-trends against which major corrections, even bear markets (with hedging) can be ridden out i.e. the peak oil mega-trend, the climate change mega trend, the population growth mega trend impact on agri-food's, the fresh water mega-trend and the emerging asian middle class mega-trend on consumer consumption and innovation. Therefore the primary purpose of forecasting is to arrive at a firm conclusion in the present that enables one to commit to a trend without which all we would be doing is looking back at what has happened and wishing we had par-taken in a particular investment trend.

However those that blindly believe their forecasts to be absolute after the fact i.e. even if they are going belly up are setting themselves up for an inevitable fall, as all forecasts at the end of the day are only educated best guesses at a particular point in time and must have a mechanism to negate the scenario's. Ironically recognising this fact can lead to the generation of more accurate forecasts as one is not psychologically committed to ones forecasts which is the downfall of many analysts that cling on to trends that have long since been negated by price action as we have observed this year with the stocks bull market rally, which IF a new bear market soon starts will conveniently be erased from the record.


Nadeem Walayat

Copyright © 2005-09 (Market Oracle Ltd). All rights reserved.

Featured Analysis of the Week

Financial Crisis Hidden History, The Warning Frontline Video- 25th Oct 09 -Michael Kirk
The Global Debt Crisis is Destroying the Economic Structure- 24th Oct 09 -Bob_Chapman
The Elements of Deflation and Surviving Today's Economic Depression- 24th Oct 09 -John_Mauldin
U.S. Faces Second Lost Economic Decade Because of Misguided Stimulus- 23rd Oct 09 -Mike_Shedlock
Risk and Uncertainty Implications for Economic Forecasting- 22nd Oct 09 -Peter_G_Klein
The Lost History Of Helmand Afghanistan- 21st Oct 09 -Adam Curtis

U.S. Dollar Attacked by Central Bank Lilliputians Profting From the Carry Trade- 21st Oct 09 -Jim_Willie_CB
Exploding U.S. National Debt Means Bye Bye Miss American Pie- 21st Oct 09 -James_Quinn
Has Gold Confirmed Weekly Breakout?- 21st Oct 09 -Bill_Downey

CREDIT & CREDIBILITY is the Emerging Trends Report's comprehensive assessment of today's financial turmoil

Copenhagen 2009 and the Stock Markets- 20th Oct 09 -Richard_Shaw
Zero Discount Value of Gold and Dethroning the U.S. Dollar- 20th Oct 09 -Michael_S_Rozeff
Zen Lessons in Market Analysis, Trading and Forecasts- 20th Oct 09 -John_Mauldin

Warning - Financial Crisis Not Over!

Saving the U.S. Dollar and Bearish Gold Volume- 19th Oct 09 -Ronald_Rosen
Goldman Sachs Earnings and Bonuses, Where's the Outrage?- 19th Oct 09 -Mike_Shedlock
U.S. Treasury Controlled by Wall Street- 19th Oct 09 -Bob_Chapman
The Ultimate Analysis Handbook - FREE
Geo-Strategic Chessboard Pushing India Towards War With China- 19th Oct 09 -Mahdi_D_Nazemroaya
WaMu Insider Trading and Naked Short Selling- 19th Oct 09 -Mike_Stathis
Debt Spiral Financial Holocaust Fiat Currencies Zero Bound, the Next Down Leg - 18th Oct 09 -Ty_Andros

Most Popular Financial Markets Analysis of the Week :

1. Exploding U.S. National Debt Means Bye Bye Miss American Pie

By: James_Quinn

Don McLean was born in 1945 and grew up in New Rochelle, New York. He was one of the earliest Baby Boomers. He was born at the beginning of America’s last High, as described by Strauss & Howe in their book The Fourth Turning. America’s victory in World War II began a new 80 to 100 year cycle consisting of four turnings of 20 to 25 years. The four cycles are a High, an Awakening, an Unraveling and a Crisis. These cycles have been recurring throughout history due to the generational mood changes as people age.

Read Article

2. WaMu Insider Trading and Naked Short Selling

By: Mike_Stathis

A couple of weeks ago, I wrote a piece discussing allegations of insider trading and illegal naked short selling of Washington Mutual, involving the banking cartel and potentially their hedge fund clients.

In this piece, I provided a link to the SEC complaint I submitted on October 7, 2008.

Read Article

3. Debt Spiral Financial Holocaust Fiat Currencies Zero Bound, the Next Down Leg

By: Ty_Andros

The demise of the G7 financial systems, currencies and economies continues to march along as incomes collapse.  The social welfare states and their banking system’s Ponzi finance-based economies are BROKE, their obligations and promises irredeemable and unpayable.

A debt spiral is in full view, irreversible with policymakers unable or unwilling and opposed to making the changes required to CREATE PRIVATE SECTOR INCOME GROWTH and control SPENDING, and which must be done to avert the final CALAMITY.

Read Article

4. Geo-Strategic Chessboard Pushing India Towards War With China

By: Mahdi_D_Nazemroaya

Since 1947, India has not fully pledged itself to any camp or global pole during the Cold War and as a result was a founding member of the Non-Aligned Movement (N.A.M.). Since the post-Cold War era that position has eroded. New Delhi has been gradually moving away from its traditional position, relationships, and policies in the international arena for over a decade.

Read Article

INO TV - Watch From Your Computer for FREE

INO TV - Watch From Your Computer for FREE

Here are the newest authors: Jack Schwager, John Murphy, Jake Bernstein, and Ron Ianieri. All experts, all well recognized, and highly trafficked by our current members.


5. U.S. Dollar Attacked by Central Bank Lilliputians Profting From the Carry Trade

By: Jim_Willie_CB

The US Federal Reserve continues to talk about their urgent Exit Strategy. My theory is they will be doing mostly talking and almost no doing. The nations that talk the least will be hiking interest rates the most, like Australia. The United States might be dead last in hiking interest rates. The credibility of the USFed will in the process continue to be harmed much more than already, which is rock bottom. The Dollar Carry Trade and the lost Petro-Dollar advantage will work to destroy the USDollar as the global reserve currency. The USFed will have to resort to unusual means to keep the world ‘interested’ and ‘involved’ in the USDollar at all. When they lose interest and involvement, the US$ will descend into the Third World. The USDollar will then be forced to find its true value, based on its own merit.

Read Article

6. If Bernake Doesn’t Raise The Fed Interest Rate Very Soon There Will Be BIG Trouble

By: Andrew_Butter

The debate about whether it was Alan Greenspan’s “fault” will continue for generations, the “other side” summed up their position nicely in a quip that came up in the debate about whether to let the Fed have more power, “ That’s like buying your teenager a sports car after he wreaked the family saloon”.

Read Article

7. Gerald Celente, Their is NO Economic Recovery, It's A COVERUP

By: Submission

Video - Interview With Gerald Celente

Their is No Economic Recovery-Its A Cover-up

Read Article


You're receiving this Email because you've registered with our website.

How to Subscribe

Click here to register and get our FREE Newsletter

About: The Market Oracle Newsletter

The Market Oracle is a FREE Financial Markets Forecasting & Analysis Newsletter and online publication.
(c) (Market Oracle Ltd) - The Market Oracle asserts copyright on all articles authored by our editorial team. Any and all information provided within this newsletter is for general information purposes only and Market Oracle do not warrant the accuracy, timeliness or suitability of any information provided in this newsletter. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We recommend that independent professional advice is obtained before you make any investment or trading decisions. ( Market Oracle Ltd , Registered in England and Wales, Company no 6387055. Registered office: 226 Darnall Road, Sheffield S9 5AN , UK )

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


27 Oct 09, 18:46
Dow Jones Predictions

I agree with you that we have gone too far too fast. But for the past month, the rise has not been a clear one (like July/August), instead it has been making ups and downs but with higher lows and higher highs.

Can't this just be a consolidation to the next move up? Based on earnings and current news I don't see what can trigger a sudden sell-off.

Do you see Dow going up again like in May?

27 Oct 09, 20:38
Stocks correction


The correction was too mild, I would not be surprised if we see a lower low i.e. break the correction low, which ironically would be a sign of strength!

28 Oct 09, 19:41
Your analysis on DOW & GBP

Dear Nadeem: Looking forward for your great analysis of US markets & GBP currency too.

I am visiting your site for your article every single day.

Thanks & Best Regards,


29 Oct 09, 09:40

Hi Kumar

been busy trading, not had the time to peform any analysis.

It takes several hours to arrive at a conclusion, so will have to be done during the weekend / emailed out sunday.



01 Nov 09, 01:29
Where are the markets heading?

Hi Nadeem,

As always, excellent analysis.

Your forecast of the stealth bull market in Q1 and Q2 was impressive to say the least. I wish I had the courage to aggressively buy and hold for a few months during that time, I would have made a fortune! Still day trading and quick swing trades did give good returns.

What’s your take on the major sell off that took place in the US on Friday. The selling pressure was so strong and there was no buying to support it whatsoever! The overall tone has also changed in the media and the so-called financial analysts are advising people to sell

Where are we heading in Q4? Do you think the correction will be brutal or a normal pull back before resuming the rise back up? The biggest pull back we have seen so far was only 7%, so what do think will happen this time? We are already 6% down on the S&P and around 5% on the DOW?

Also what’s your take on the US market in the first half of 2010 will it resume growth or do you believe in the W-shaped double dip recession? I find it hard to believe that we will go back to the March lows anytime soon. I feel we are in the beginning of a new business cycle and it will take a few years before we experience a similar meltdown. I just hate the all doom and gloom analysts/economists like Roubini and Mark Faber. I feel they only want to make a lot of noise in the market by inducing fear – of course get free publicity and make money out of it. What do you think?

Finally, do you buy into this hyper-inflation theory? If so, then when do you expect it to happen? Is it a 2010 or so 2011 story? What sort of an impact will it have on stocks, oil and real estate?

Too many questions I know, but you are one of a very few analysts who I truly value their opinion.



01 Nov 09, 11:18
stocks where next?


I am working on an update, will email out in a few hours.

I am skeptical of fundemental analysis because its only really useful in hindsight, offcourse by then the market has MOVED!

In March we were told corporate earnigns means no rally until 2010, as I warned to ignore. If you follow fundementals you will always be 6 months behind the market.

Hyperinflation is not visible. Stagflation is.

we are headign for a double dip recession the severity of which is not easy to gauage at this time, but yes it will hit stocks, but I suspect not commodities.

Anyway more on this in my update to complete...



Post Comment

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