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Catching a Falling Financial Knife

Stocks New Bull Market High's Leaves Bears Foaming at the Mouth

Stock-Markets / Stock Markets 2013 Jan 26, 2013 - 04:30 PM GMT

By: Nadeem_Walayat

Stock-Markets

The stock market has so far put in a spectacular bull run for January 2013, which has surprised both bulls and bears as all of the major stock market indices set new bull market highs, including the index which I track and trade, the Dow Jones Industrial Averages which is now within touching distance of 14,000.

Meanwhile delusional bears right across the globe can literally be seen foaming at the mouths as illustrated by the diatribe that continues spew out of commentary of an always imminent bear market, crash, collapse etc... When the reality is as the following charts illustrate that not only have they and everyone who listened to them missed out on what is a stocks bull market that is approaching the END of its FOURTH YEAR ! But that have actively been betting against an exceptionally strong recent bull run that is the exact mirror image of the crash that they have been so furiously proclaiming as always being imminent.


FTSE - Up 12% in 2 Months

DAX - Up 13% in 2 Months

DOW - Up 11.5% in 2 Months

What Is the Big Picture

The big picture remains as I have iterated countless times over the years (The Inflation Mega-trend Ebook of Jan 2010 (FREE DOWNLOAD), and as illustrated by the below graph that asset prices tend to be LEVERAGED to Inflation, which is precisely the trends that have subsequently transpired from stocks to commodities such as Gold and as I have been flagging during 2012 for the US housing market going into 2013.

Note that the Inflation Mega-trend is EXPONENTIAL, and no matter how loudly the delusional deflationistas scream for always imminent DEFLATION, it is just NOT going to happen, if anything government actions i.e. QE-4EVer is going to result in the ratcheting higher of the the Inflation Mega-trend going forward.

Frankly, I just do not understand why so many people that purport to be experts on the financial markets can remain so blind to what is blatantly so obvious. The only logical conclusion is that they never put their own money on the line and thus never face the financial consequences (PAIN) for being wrong, for had they followed their advice such as betting against a near 4 year bull market then they would have already bankrupted themselves several times over by now, but instead merrily go around spouting what amounts to nothing more than verbal diarrhoea.

Trading the Stocks Stealth Bull Market

My investing strategy for the duration of the bull market has been fairly simple, as I have repeated countless times over the years, which is that the greater the deviation from the bull market high then the greater the buying opportunity presented. See the Stocks Stealth Bull Market ebook (Free Download) for examples of how one should perceive price action during multi-year trends, as my analysis during 2012 has concluded as illustrated by Mid year trend forecast -16 Jun 2012 - Greece Election Eurogeddon Stock Market Trend Analysis and Forecast

Where Next ?

The new year bull run has now put the Dow within touching distance of the psychologically important 14,000 level and my long standing target of 14,200 as illustrated by the March 2011 Stocks Stealth Bull Market ebook (FREE DOWNLOAD). However, as subsequently expected the stock market marked time during 2012 as it sought to unwind speculative interest built up during the preceding 3 year bull run which has resulted in the Dow taking much longer than originally expected to home in on my 14.2k target. Therefore my next in-depth analysis will seek to map out an up-to date trend for the Dow for the whole of 2013 and possibly beyond, ensure you are subscribed to my always free newsletter to get this in-depth analysis and detailed trend forecast in your email in box.

In the meantime check out my other recent concluding trend forecasts for 2013.

Also check out my recent video on Trading Chaos Theory Market Fractals

Original text of Chaos Trading

Also Ensure you are subscribed to our new youtube channel for video versions and educational material.

Source and Comments: http://www.marketoracle.co.uk/Article38697.html

Your analyst wondering if he should use cheap money to further leverage his portfolio to Inflation.....

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2013 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of three ebook's - The Inflation Mega-Trend; The Interest Rate Mega-Trend and The Stocks Stealth Bull Market Update 2011 that can be downloaded for Free.

Stocks Stealth Bull Market Ebook DownloadThe Interest Rate Mega-Trend Ebook DownloadThe Inflation Mega-Trend Ebook Download

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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 trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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Catching a Falling Financial Knife