Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
S&P 500 Just 2% Below Record High, But There's More Stock Market Uncertainty - 19th Jul 18
Stock Market Technical Picture - 19th Jul 18
Gold Market Signal vs. Noise - 19th Jul 18
Don’t Get Too Bullish on Gold - 19th Jul 18
Bitcoin Price Rallies to Upper Channel – What Next? - 19th Jul 18
Trump Manchurian President Embarrasses Putin By Farcically Blowing his Russian Agent Cover - 19th Jul 18
The Fonzie–Ponzi Theory of Government Debt: An Update - 19th Jul 18
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

What Happened to the Stock Market Crash?

Stock-Markets / Financial Markets 2009 Nov 07, 2009 - 01:10 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleDear Reader

The big news of the week was the U.S. unemployment rate breaking above 10% to the highest rate in 26 years with all the expectations of the jobless recovery continuing well into 2010. Other news out of the U.S. came from the Fed confirming the view that U.S. Interest rates would be kept low for sometime.


Meanwhile in Britain the Bank of England announced that it will print a further extra £25 billion to keep the mild economic recovery chugging along into a May 2010 General Election, bringing the total now to £200 billion. Back in July 2009 the consensus was that the Bank had halted its Quantitative Easing programme at £125 billion.

i.e.

Telegraph - 10th July 2009 - Bank of England indicates an end to quantitative easing

Daily Mail - 9th July 2009 - Bank of England turns off printing presses on 'quantitative easing' …

Independent - 10th July 09 - City is caught by surprise as Bank stops 'printing money'

QE now at £200 billion illustrates the lemming like behaviour of the mainstream press that tend to act like sheep baahing in the same direction, though if they actually took the time to analyse the situation then maybe they would come up with a more accurate conclusion ?

At the time in the analysis - Irrelevant UK Base Interest Rate on Hold as Real Rates have Already Begun to Rise, I concluded that it was not possible for the Bank of England to halt money printing at the then current level of £125 billion and most likely the total would hit £250 billion by year end.

Financial Market Trends and Forecasts Update

Last weekends in depth analysis (Stocks, Dollar and Gold Bull Markets Inter-market Analysis) gave updated projections for key markets into the end of 2009 and early 2010 as summarised below:

Gold Targeting $1200 by March 2010 : $1,096 ($1,046) + 4.8%

Gold is performing strongly as a consequence of the breakout from a near 30 year trading range. The Bull scenario remains in tact as long as $1020 holds.

Dow Targeting 10,350 to 10,500 During December 2009 :10,023 (9,712) + 3.2%

The price action remains for the Dow to exhibit a volatile trend into year the end target. The risk of 9430 breaking has diminished a little, but remains a possibility until the Dow breaks above 10120 which would effectively set the floor in the range 9700 to 9430.

What happened to the Crash ? Octobers over bearing bearish calls emanating right from the top of the analyst food chain as my recent article on Nouriel Roubini illustrated, the bears must be eyeing hibernation if 10120 breaks? Next week should prove interesting, though I suspect a Dow new 2009 high may be accompanied by the game of stock index musical chairs i.e. Forget the Dow and pick an index that has NOT gone to a new 2009 high to cling on for a while longer.

In Summary - 10,120 break is required to confirm this weeks apparent strength, though not far, only 100 points.

USD Targeting 84 during December 2009 : 75.90 (76.36) - 0.6%

In one word, WEAK, Whilst the previous low holds the bullish scenario manages to remain in tact.

Question from DPM - On dollar - Your prediction related to dollar multi-month up cycle is not sync with long upcycle run on Dow. They are inversely related. Your article on 'Aug 24, 2009' told about 10K level on DJIA and bull run for dollar( dollar index was around 77.5). Dow went higher and dollar went down(75).

I respect your views but hope to get more clarity regarding Dow when dollar reaches 90.Similar question was also asked on 'Aug 24, 2009' by another reader.

Answer - USD has shown weakness, it is not rallying, last weeks analysis revised this years target to 84. The focus of analysis is on the actual market rather than any suggestive inverse relationship. I would NOT be surprised that in a time when virtually everyone believes and alludes to the Dow / USD inverse relationship that it is at THIS TIME that it breaks down, which is why one needs to primarily keep focus on the actual market being traded.

Want more forecasts to help make your mind up ?

Robert Prechter of Elliott Wave International has given access to all of our readers to no less than EIGHT reports, including their current monthly issues of the Elliott Wave Theorist and Financial Forecasts as well as the short-term updates. Access is only available for a short period of time so ensure to download at your earliest!

Source: http://www.marketoracle.co.uk/Article14855.html

Your analyst.

Nadeem Walayat

http://www.marketoracle.co.uk

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

Featured Analysis of the Week

Most Popular Financial Markets Analysis of the Week :

1. The Government Will Default on Its Debts

By: Gary_North

The governments of every major nation are going to default on their debts. There are two relevant questions: (1) How? (2) When?

Establishments around the world all deny this. They have gained power and wealth by means of the expansion of government. They have justified their success by insisting that the government-business alliance is the only way to establish economic growth and economic security for the masses. This claim rests on a more fundamental claim, namely, that an unhampered free market is destructive of economic stability and will inevitably lead to economic depression.

Read Article

2. How and Why China Will Flood the Gold Market

By: DailyWealth

Jeff Clark of Casey Research writes: As you read this, the Chinese government is doing an extraordinary thing... something nearly unheard of in the modern world.

It is encouraging citizens to put at least 5% of their savings into precious metals.

Read Article

3. Telegraph UK House Price 55% Crash Forecast Revisited

By: Nadeem_Walayat

Back in March if this year the Telegraph and other mainstream media ran with a scare story that UK house prices could crash by a FURTHER 55%, this was after UK house prices had already fallen by 22% and whilst house prices had yet to bottom the Telegraph story at the time seemed to be a completely ridiculous scare mongering purely for the purpose of sensational headline grabbing rather than presenting something that their readership could utilise to their advantage.

Read Article

4. Nouriel Roubini's 2009 Stock Market Calls Track Record

By: Nadeem_Walayat

Nouriel Roubini, Dr Doom the academic economist who has repeatedly peddled the stocks bear market case to a captured audience of naive investors has again come out with another in a series of Doom stories to scare investors away from the market.

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. http://tv.ino.com/

 

5. Is Debt-Deflation Economic Depression Just Beginning?

By: Mike_Shedlock

Last Thursday I received an email from David Meier, Associate Advisor at the MotleyFool concerning Debt-Deflation.

David asked if I had any comments on his article Debt-deflation: Just the beginning? Here is a partial listing:

Read Article

6. Stocks, Dollar and Gold Bull Markets Inter-market Analysis

By: Nadeem_Walayat

This analysis seeks to update the trend prospects for all three major markets into at least the end of this year by taking into account their inter-market relationships which should resolve in a more accurate projection for each individual market.

Read Article

7. United States Catching the Argentinian Economic Disease of Hyperinflation?

By: John_Mauldin

I have been in South America this week, speaking nine times in five days, interspersed with lots of meetings. The conversation kept coming back to the prospects for the dollar, but I was just as interested in talking with money managers and business people who had experienced the hyperinflation of Argentina and Brazil. How could such a thing happen? As it turned out, I was reading a rather remarkable book that addressed that question. There are those who believe that the United States is headed for hyperinflation because of our large and growing government fiscal deficit and massive future liabilities (as much as $56 trillion) for Medicare and Social Security.

Read Article

Subscription

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) 2005-2009MarketOracle.co.uk (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 )


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Shiva
07 Nov 09, 22:32
Dow Correction

Nadeem,

Thanks for the analysis. I notice you have a fairly low bullish target of 10300 to 10500 ( at most 400 points from here) for the next 2 months. Is this based on the following analysis:

1. We have had a bull rally since March without a major corrections. So if we are bullish it can't go up very high from here.

2. We may see a big correction in the immediate future, following which there will be a new bull leg up that can take up to this target.

Please correct me if I am wrong. Also, if you agree, which one do you favor more?


Nadeem_Walayat
08 Nov 09, 10:47
Dow

I most agree with Number 1, as per last weeks analysis as of Dow 9712.

50% was the target for 2009 which has been achieved, last weeks analysis extends the rally into year end to approx 60%. As we saw last week it will be volatile getting there !

Beyond end 2009 ? well we shall have to wait and see what happens during the next few weeks first, but the bull market remains IN TACT which is the key point.


Post Comment

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

6 Critical Money Making Rules