Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17
The Trump Administration’s IP Battle Against China - 15th Nov 17
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17
Gold on the Ledge, Trend Forecast - 14th Nov 17
The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
Silver Sign’s Confirmation & More - 14th Nov 17
Could This Be The End for Tesla? - 14th Nov 17
Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17
Why Having Good Credit Is Important If You Want to Invest - 14th Nov 17
The Bitcoin Bubble Explained in 4 Charts - 13th Nov 17
How the US Has Secretly Subsidized China to Produce Eco-Unfriendly Solar Panels - 13th Nov 17
The Increasingly Unstable Middle East Must Be On Every Investor’s Radar - 13th Nov 17
Stock Market Critical Supports are Being Challenged - 13th Nov 17
The One Chart All Investors Should See Before 2018 - 13th Nov 17
Short-Term Stock Market Uncertainty Following Recent Rally, Will Stocks Continue Higher? - 13th Nov 17
Is Hillary Just the “Fall Guy” for the Intel Agencies and their Moneybags Bosses? - 12th Nov 17
Stock Market Correction Phase - 12th Nov 17
Finally, The Fall Of The House Of Saud - 12th Nov 17
Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - 11th Nov 17
E-franc, E-krona... E-volution? - 11th Nov 17
Gold Investment Stalled - 11th Nov 17
Smart Ways to Get Loans Online - 11th Nov 17
What Can Pot Teach Us About Economics and Government? - 10th Nov 17
Can Stocks and Bonds go Down at the Same Time? - 10th Nov 17
Gold Market 2017 Will We See a Replay of 2015 and 2016? - 10th Nov 17
Oil markets turn bullish with shift to backwardation - 10th Nov 17
The Strange Behavior of Gold Investors from Monday to Thursday - 10th Nov 17
Where to Start Your Cryptocurrency Company - 10th Nov 17

Market Oracle FREE Newsletter

Forex Trading Free Week

Stock Market Resolves to Break Higher Leaving Bears in a State of Confusion

Stock-Markets / Financial Markets 2010 Jun 20, 2010 - 11:50 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleAn early Monday stocks rally to just above Dow 10,300 concluded in a downtrend into the close to 10,200. The Dow opened up Tuesday, with the trend continuing higher into the end of the week with the Dow closing up 239 at 10,450 (10,211), which built on the preceding weeks 279 points advance.


Last week-ends analysis (13 Jun 2010 - Stock Market Bulls Watch for a Higher High Whilst Bears Growl For New Lows ) concluded with an early Monday peak at around 10,300, to target a minor downtrend to 10,000 by Wednesday, with the Dow breaking above 10,300 by the end of the week.

The overall trend continues inline with the big picture as detailed in the last in depth analysis and forecast - (16 May 2010 - Stocks Bull Market Hits Eurozone Debt Crisis Brick Wall, Forecast Into July 2010)

Which itself is inline with the even bigger picture as detailed in the Inflation Mega-trend Ebook over 4 months ago (FREE DOWNLOAD).

DOW Stock Market Forecast 2010

The overall trend pattern continues inline with the expectations for a corrective trading range that seeks to correct the preceding 13 month bull market into at least Mid July by which time I will have a clearer picture as to when the market is likely to break to new highs or if it will put in a further lower low i.e. to generate a large ABC pattern as the market enters the seasonally weakest part of the year for a low to be followed by a continuation of the stocks stealth bull market towards a late 2010 Dow target of between Dow 12,000 and 12,500.

The current trend continues to firm that the stock market has entered its up swing phase that targets 10,700+ by early July.

Range Producing Bearish Confusion

Its confusing to gauge where the bears stand, as a quick review shows a mixed picture of extreme vagueness, for instance Marc Faber, is now luke warm bullish on the stock market into September 2010 as his recent CNBC video illustrates.

Other prominent bears remain stuck in the view that April was the top, with the crash is coming crowd revising the crash is always imminent mantra virtually every other day, as if something written during the past 12 months with the word crash in the content is evidence that they called an eventual crash.

Bears Put Hopes on Low Volume Rally

Low volume rally mantra is again one of the driving forces behind bearish conclusions that stocks must head lower. However the obvious failure here is to recognise that the whole bull market has been on LOW volume which is indicative of a STEALTH bull market that RISES on low volume precisely because it is NOT being bought into by the majority of investors (both big and small), as I have repeatedly voiced over the past year i.e. - (02 Nov 2009 - Stocks Bull Market Forecast Update Into Year End )

VOLUME - Volume has been WEAK during the rally, which contrary to much bearish commentary implies that this rally has NOT been bought into. So all of the talk of hyper bullishness is basically rubbish as there is no sign of such irrational exuberance in the volume, which remains heavier on the declines than the rallies and thus suggestive of selling rather than buying into the rally. Which is good behaviour for a stealth bull market.

Sentiment

Sentiment wise it is mixed picture, which is how one would expect by now of an obvious trading range that is becoming more established in the psyche of market participants and hence much of the commentary out there in the blogosfear, a marked difference to when the Dow was bottoming out when the perma bears such as Nouriel Roubini were publically salivating on CNBC despite the fact that they are basically repeating virtually the same that is brought out towards the end of every correction since the stock market bottomed in March 2009 as illustrated in the article (23 May 2010 - Nouriel Roubini Stock Market 20% Drop Forecast, Time to Buy?)

Technical Picture

The Dow has put in a double bottom at about 9,800 that targeted a break above 10,300. The break above 10,300 to 10,480 targets a trend to 10,700+, probably at 10,900. However near term the breakout to 10,300 may require a retest i.e. stocks early next week revisiting 10,300 before continuing higher. This to me suggests a wide trading range for the week with an upward bias, i.e. early week decline before the Dow trend higher to above 10,500, how high ? there's not much resistance between the current price and Dow 10,700.

On the negative side a break below 10,300 could suck the Dow back into the 10,300 - 9,800 trading range, though last weeks price action suggests this is not going to happen, in fact suggests 10,300 is going to act as a strong support level.

Conclusion

Early week weakness is expected to be supported at Dow 10,300 for a trend higher into the end of the week which could include the Dow trading above 10,700, targeting a close in the region of 10,550 to 10,600, up 100 to 150 points on the week. The risk to this scenario is if 10,300 support folded with the Dow being sucked back into the vortex of the 10,300 - 9,800 trading range.

Big Picture- Sideways corrective trading range continues with current trend in the UPSWING Phase that Targets 10,700+ by early July.

Gold Brief

Gold hit a new all time high this week, my long standing target of $1,333 is now not so far away. I am repeatedly asked when to buy ? Well you accumulate into bull markets on corrections as I have indicated several times during the past few weeks when Gold was trading at $1,175. Look buying Gold at $1,250 or $1,150 makes little difference in profit terms if Gold gets to $2,000 (as I expect it to) and probably a lot higher.

Obama $20 Billion Shakedown of BP

Obama gangster style put a gun to BP and said to cough up $20 billion instantly or else. Perhaps the Indian government should likewise threaten Union Carbide to pay up $20 billion for the 5,000+ Bhopal indian deaths or else?

Congress barbequed the CEO of BP. However what BP needs to do is to kill that damn oil well, then they can let the lawyers let rip to determine how much of the blame and ultimately the costs lie with Haliburton, Transocean, Anadarko Petroleum, Regulators and BP. I especially noted Anadarko Petroleum who own 25% of the well, and hence are liable to 25% of the costs were squirming to offload 100% of the blame on to BP, probably because Anadarko Petroleum could not survive being hit with anything like 25% of the liabilities (BP owns 65% of the well hence legally is only responsible upto a maximums of 65% of the eventual costs unless U.S. Law just exists for publicity purposes).

Deepwater Oil Spill, Peak Oil and the Inflation Mega-Trend

The Deepwater spill is the first of many more similar spills or rather ocean oil well blowouts to come because virtually all of the cheap easy to get at oil has gone, the only oil left to get is the expensive high risk difficult to get at deep water sources. This means higher oil prices which means higher inflation.

Don't be confused by oil being just another commodity, it is not, it is the life blood of our way of life as we exist in the oil age. The impact of higher oil prices, and we are talking about $200+ are highly inflationary because basically ALL currencies at the end of the day are priced in how much oil they can buy, so I can imagine there will come a day when goods are priced in terms of how many gallons of crude oil its taken to produce them. Which means the measure of wealth will shift to those that have oil resources from those that have paper wealth, which is a manifestation of the inflation trend as paper wealth goes up in smoke therefore people need to change their mindset when they view their wealth, they need to view it in terms of how much is held in scarce resources with oil at its pinnacle, because nothing can be resourced, grown or and supplied without oil as opposed to cash sat in the bank on pittance sub CPI interest rates as UK savers are having to currently suffer, as its value is being effectively stolen by the government via the inflation stealth tax.

World Cup

England players are complaining that the fans are booing them on the pitch, well then the players should stop playing crap!

Your peak oil inflation mega-trend investing analyst.

Comments and Source: http://www.marketoracle.co.uk/Article20457.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Featured Analysis of the Week

The Next Catastrophic Bubble to Pop Will Be Private Sector Debt - 18th June 10 - Andrew_Butter
Stock Market Choppy Recoveries and Rally Attempts - 18th June 10 - Chris_Ciovacco

Stock Market Crash Report - FREE

EXTEND & PRETEND: A Matter of National Security - 18th June 10 - Gordon_T_Long
The Crisis of Capitalism; Why the Socialists are Wrong - 17th June 10 - David_Knox_Barker
Afghanistan Resources War For Vast Reserves of Minerals and Natural Gas - 17th June 10 - Michel_Chossudovsky
The U.S. Econonomies Future
Mr. Denninger and Gold, A Rebuttal to All Fiat Money Apologists - 17th June 10 - Gordon_Gekko
Silver, Is Now a Good Time to Buy? - 16th June 10 - Jeff Clark
Psychology of the Copper Market, Implications for the Global Economy - 16th June 10 - Gary_Dorsch
Free Deflation Ebook
FREE Email Trading Course
Free Trading Videos
Gold Bullion Investing
What the End of the Oil Age Looks Like - 16th June 10 - Richard Heinberg
The Inflation Mega-Trend Continues With UK CPI 3.4%, RPI 5.1% - 16th June 10 - Nadeem_Walayat
The U.S. Federal Government Debt and Deficit - Congressman, Heal Thyself! - 15th June 10 - Paul_L_Kasriel
Buy and Sell Gold On-line Securely
The Kyrgyzstan Crisis and the Russian Dilemma - 15th June 10 - Peter Zeihan
Government Quest to Buy Inflation, Print Baby Print - 15th June 10 - Dylan Grice
The Fractional Reserve Banking System Explained - 14th June 10 - Robert_Murphy
Stock Market Stuck as Investors Demand Risk Premium for Buying - 14th June 10 - Jon D. Markman
Two Decades Of Debt Induced Greed Unraveling into the Greater Depression - 13th June 10 - James_Quinn
Stock Market Bulls Watch for a Higher High Whilst Bears Growl For New Lows - 13th June 10 - Nadeem_Walayat

Most Popular Financial Markets Analysis of the Week :

1. Gold Going to Parabolic Top of $10,000 by 2012 For Good Reasons

By: Lorimer_Wilson

No wishful thinking here! As I see it gold is going to a parabolic top of $10,000 by 2012 for very good reasons - sovereign debt defaults, bankruptcies of “too big to fail” banks and other financial entities, currency inflation and devaluations - which will all contribute to rampant price inflation.

Read Article

2. Implications of the Gold Silver Price Divergence...

By: Robert_Murphy

Austrian economics is superior to Marxism in every respect, and this includes internal, sectarian squabbles. When we Austrians feel the time is ripe for another bloodletting — it keeps us strong by thinning the herd once in a while — we argue over fractional-reserve banking.

Read Article

3. Stock Market Bulls Watch for a Higher High Whilst Bears Growl For New Lows

By: Nadeem_Walayat

Disappointing U.S. retail sales data on Friday failed to dent the stock market as it closed higher on the day and the week at Dow 10,211, up 279 (9,932). From the start of the week the stock market trended lower into an early week low at just below 9,800 that was followed by a volatile uptrend right into Friday's close.

Read Article

The U.S. Econonomies Future

4. Two Decades Of Debt Induced Greed Unraveling into the Greater Depression

By: James_Quinn

We are currently in the midst of a Fourth Turning. This twenty year Crisis began during the 2005 - 2008 timeframe with the collapse of the housing bubble and subsequent repercussions on the worldwide financial system. It is progressing as expected, with the financial crisis deepening and leading to tensions across the world. It will eventually morph into military conflict, as all prior Fourth Turnings have. The progression from High to Awakening through the Unraveling took from 1946 until 2006. The most treacherous period of the Saeculm is upon us.

Read Article

5. End Game, Gold Investors Will be Destroyed

By: Shelby_H_Moore

Trail of tears and broken dreams (delusions) lies ahead...

Gold will go very high in fiat value, that is not the problem.

Read Article

6. The Inflation Mega-Trend Continues With UK CPI 3.4%, RPI 5.1%

By: Nadeem_Walayat

Another month and another release of UK inflation data at far above the Bank of England's target of 2% and above the upper limit of the Banks 1% to 3% range by reporting CPI of +3.4% for May. Thus the BoE Governor, Mervyn King will write another letter to repeat that the high rate of inflation is just "temporary", though when does "temporary" high inflation stop being temporary? 6 months? a year? 2 years? as the country sleep walks into stagflation with all of the consequences for wage earners and savers.

Read Article

7. The Next Catastrophic Bubble to Pop Will Be Private Sector Debt

By: Andrew_Butter

Much is said about the propensity of USA to pile on public debt to try and right the wrongs of the moronic lenders of yester-year ….and the risks that entails, but private sector debt is a much bigger “Elephant” in the Jacuzzi than public sector debt.

Read Article

8. What the End of the Oil Age Looks Like

By: Richard Heinberg

Following the failure of the latest efforts to plug the gushing leak from BP’s Deepwater Horizon oil well in the Gulf of Mexico, and amid warnings that oil could continue to flow for another two months or more, perhaps it’s a good time to step back a moment mentally and look at the bigger picture—the context of our human history of resource extraction—to see how current events reveal deeper trends that will have even greater and longer-lasting significance.

Read Article

Subscription

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) 2005-2010 MarketOracle.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 )


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Nick
21 Jun 10, 02:50
Euro USD

Hi Nadeem

What do you think about the USD Euro currency pair? Jim Rogers said that he expected a bounce and was buying the Euro. It still looks shaky to me in light of Spain. Do you have any thoughts on it?

Thanks

Nick


Nadeem_Walayat
21 Jun 10, 07:27
EUR/USD

The Euro is rallying because it was deeply oversold, probability favours at least a retest or two below 120.


Jim Sikes
22 Jun 10, 09:16
Dow 4000

Boy!!! Have you guys ( girls ) got a real surprise coming your way ... and very soon.

Get ready for a 4,000 Dow. Also watch as gold drops and the Dollar soars!

Enjoy,

Jim Sikes


Martin
22 Jun 10, 22:09
Long Term Forecast

Hi Nadeem,

I've been following your analysis for a few months and I'm really impressed with your predictions. Do you have a forecast that extends beyond 2010? What type of correction do you anticipate after a 5-wave rally to your Dow target of 12500.

Thanks.


Gerry H
25 Jun 10, 02:59
perma-bears bashing

hello Nadeem,

Great site!

One thing that confuses me; you love to degrade the "perma bears" as you call them (personal grudge?). I'm not a perma-bear, I'd love to see a stock market that only went up. But looking around the world, what do I see? A monstrous, monstrous mess! A complete disaster in every way, from all the debt and failed financial system to the declining environment and everything in between. Peak oil by itself is a world-wide disaster happening in slow motion.

I don't understand why you see everything as so rosy. Stock market going up? Are you saying the market can completely ignore reality, or more likely, all the printed money will push the market up and nothing else actually matters?

I do not believe the US and others can continually paper over their problems. Eventually they will be forced to start serious cutting (Medicare, social security, etc.), but it is now too late to fix the problem without serious economic upheaval.

cheers,

Gerry

Victoria, BC, Canada


Nadeem_Walayat
25 Jun 10, 06:03
perma bears
Hi
When I picture perma bears I have the likes of Roubini in mind that appear in the mainstream press to pronounce the end of the rally mantra. The reason I frequently bash perma bears is because one day they will be right, but what will not be reported in the mainstream press, as is the case every time is -


Best
NW
Martin
25 Jun 10, 09:02
Roubini Indicator

Nice chart! This is by far the best indicator I have seen to mark the end of corrections. If you add the Prechter calls in there I think you will never miss another bottom. lol


truthhurtsss
25 Jun 10, 10:47
Ha,ha,ha,ha,ha

Martin, I like your very shrewd observation and conclusion in your last sentence. LOL nonstop......


christian
02 Jul 10, 20:19
economy is in doldrums...that's reality

actually.....i think the only way stocks rise is politico's gettin in shape for election season....puttin the pressure on the fed and treasury ....and gettin some sort of added support and stimulus

housing is toilet bound again and jobs are not adding at a pace to keep up with new entrance nor do i see a reason they would.


sc
03 Jul 10, 01:44
chart

Roubini calls economic direction and then off the cuff calls market. The economic direction he's right on usually. Eventually his market direction comes as well ,but like most people he can't call the timing precisely. I include Nadeem in that as well so he shouldn't assune such self righteousness. His up up and away call seems to have gone the same way has Roubinis down call. That isn't a criticism. It's simply that these markets can move a hell of a lot faster than anyone's ability to make prcise timing calls. Indeed that is why it simply stupid to try. Sensible call is to determine appropriate asset allocation at the varying parts of the market cycle. That's what akes the money.


Post Comment

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

Catching a Falling Financial Knife