Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Stock Market, Dollar and Gold Trend Facts

Stock-Markets / Financial Markets 2010 Jul 22, 2010 - 02:21 PM GMT

By: Steve_Betts


Best Financial Markets Analysis ArticleI’ve known for a long time that elections were all about money, but I never realized just how bad and broad the problem was until I read that most of the sitting judges along the Gulf Coast receive donations from big oil. Big money has its hand in everything and it is the dominant force in the United States today. It elects your government, decides how you live, decides what and how you eat, where you can go and where you can’t, and what kind of life your children will live. It’s the modern version of the old fashioned “company store”, the theme from Tennessee Ernie Ford’s song “Sixteen Tons”.

The American electorate allowed that to happen and now the whole process has taken on a life of its own, like a cancer cell that multiplies, grows, and spins out of control. One day you’re feeling a little tired, you go to the doctor, he pulls out an x-ray and the next day you’re getting your affairs in order. There will good and bad days along the way, but the trend is set in stone and it is down. That’s where we are today.

The US government has spent anywhere from US $3 to US $9 trillion dollars so that twenty or so companies could report “blow out results”. These results are the combination of transferring debt from them to you and flouting generally accepted accounting practices. Big money has made this all possible. You on the other hand have yet to see a new water plant, sewage line, school, road or electric plant built in your city. Remember Obama standing there just after he was elected promising all of those things? Money for infrastructure! Well you’re going to have a long, long wait before any of that comes to pass. If I may paraphrase, hell will freeze over first. All of this is creating uncertainty in the markets and that’s why we’ve seen so much volatility; eleven 90% down days and nine 90% up days since April 26th. Just look at the last eight sessions with four triple digit changes, two up and two down. If you don’t like what you see, just go away and come back the next day and it all will have changed. That type of volatility is draining, like chemotherapy, and eventually it saps the life right out of the market and it collapses of its own weight. We are headed toward that end now.

Whenever you have conditions like we see today, it’s best to leave the guesswork to everybody else and focus only on what you really know. That’s why I kept the preceding chart as simple as possible. So here’s what I know:

  • The Dow topped at 14,164.53 on October 9, 2007.
  • The Dow fell from the October 9th all-time high to 6,469.95 on March 10, 2009 giving back 57.7% of its bull market gains accumulated over twenty-five years.
  • From the March 10th low the Dow rallied up to 11,258 on April 26, 2010 recovering 61.8% of the previously mentioned losses.
  • From that April 26th high the Dow has carved out a series of three lower highs (small horizontal black lines) and three lower lows (small horizontal green lines).
  • The upper band of the current trading range (descending blue line) has yet to be violated.
  • Days with big losses have consistently heavier volume than days with big gains and that has been the case since the October 9, 2007 all-time high.
  • The Dow did not confirm the all-time high in the Transports posted on May 26, 2008
  • The Dow did not confirm the April 30, 2010 closing high, and
  • The Dow closed below its February lows but the Transports have not closed below their respective February low. This is yet another non-confirmation as you can see below:

Whenever you analyze the market it’s always good to state just what you know and leave any opinions and suppositions to the CNBC crowd. To date I can see that the Dow has not violated the upper band of the descending trend lines that originate with the April 26th closing high while the Transports could be on the verge of doing so today.

I also know that the Transports have a huge divergence with the Baltic Dry Index as you can see below.  Compare the July decline in the BDI with the July rally in the Transports. It is supposedly common knowledge to say that China is responsible for the former, but that overlooks the fact that the BDI takes in goods shipped all over the world and that includes the United States!

If I want to expand what I know to the US economy as a whole, I see that consumption continues to decline, housing continues to fall, and unemployment continues to be a real problem. I know that the US is a consumption based economy and that consumption was financed by sucking money from constantly rising housing prices. I also know that real wages are declining and savings is actually increasing in the US. Finally, I know the level of debt in the US is truly staggering and continues to increase daily. The only solution on the table is to print money; it’s a one size fits all panacea that will eventually kill the patient. Hence the US dollar:

Think of the United States as a very large company and think of the US dollar as its common stock. As you can see the share price has been declining since 2001.

We have seen two significant reactions over the last two years, and the second one has apparently ended. Below I have posted a daily chart of the dollar that shows the break down and change in trend:

This produces a very strange combination of a declining dollar and a deflating economy and must have Bernanke staring at the ceiling in his bedroom at 3 am. I saw him in his testimony yesterday and he tries to hedge his bets but in the end he is forced to take a stand. Recently the dollar broke down out of its rising trading range (black circle) and then broke down through strong support at 83.35. After a brief reaction back up to 83.39, the greenback fell hard today and is trading at 82.56 as I type (1 pm EST). Once strong support at the old historical high of 80.16 is violated it will be clear to all concerned that the end is near and the dollar will become a financial pariah. Without going into detail, that’s why gold will not decline for more than a couple more weeks, and will not fall to US $850 as so many are predicting. Gold is experiencing a hiccup; no more and no less. So we have the primary in the Dow and dollar headed down, while the primary trend for gold is headed higher. That’s what I know and that’s real. Therefore you neither short the dollar and Dow or you stay out, and you either own gold or you stay out. Finally I know that going against the trend will take you into bankruptcy, and that concludes our lesson for today.

[Please note that the new website at will become operational this week. Also, note that you can contact us at our new e-mails, (general inquiries regarding services), (administrative issues) or (any market related observations).]

By Steve Betts

Web site:

The Stock Market Barometer: Properly Applied Information Is Power

Through the utilization of our service you'll begin to grasp that the market is a forward looking instrument. You'll cease to be a prisoner of the past and you'll stop looking to the financial news networks for answers that aren't there. The end result is an improvement in your trading account. Subscribers will enjoy forward looking Daily Reports that are not fixated on yesterday's news, complete with daily, weekly, and monthly charts. In addition, you'll have a password that allows access to historical information that is updated daily. Read a sample of our work, subscribe, and your service will begin the very next day

© 2010 Copyright The Stock Market Barometer- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - 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