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
Soybean Price Hits 9 Year Low Due to Trade War - 24th Jun 18
Small Cap Stocks, Technology and Pharma To Drive A Renewed Market Rally - 24th Jun 18
Gerald Celente: Why You Still Need Guns, Gold, and a Getaway Plan... - 23rd Jun 18
Cheap Gold Stocks Bottom Basing - 23rd Jun 18
A Trade War Won’t Be Good for the US Dollar - 23rd Jun 18
SPX/Gold, Long-term Yields & Yield Curve 3 Amigos Update - 22nd Jun 18
Gold - How Long Can This Last? - 22nd Jun 18
Dow Has Fallen 8 days in a Row. Medium-long Term Bullish for Stocks - 22nd Jun 18
Trouble Spotting Market Trends? This Can Help - 22nd Jun 18
Financial Markets Analysis and Trend Forecasts 2018 - A Message from Nadeem Walayat - 21st Jun 18
SPX Bouncing Above Support - 21st Jun 18
Things You Need To Know If You Want To Invest In Bitcoin Now - 21st Jun 18
The NASDAQ’s Outperformance vs. the Dow is Very Bullish - 21st Jun 18
Warning All Investors: Global Stock Market Are Shifting Away From US Price Correlation - 20th Jun 18
Gold GLD ETF Update… Breakdown ? - 20th Jun 18
Short-term Turnaround in Bitcoin Might Not Be What You Think - 19th Jun 18
Stock Market’s Short Term Downside Will be Limited - 19th Jun 18
Natural Gas Setup for 32% Move in UGAZ Fund - 19th Jun 18
Magnus Collective To Empower Automation And Artificial Intelligence - 19th Jun 18
Trump A Bull in a China Shop - 19th Jun 18
Minor Car Accident! What Happens After You Report Your Accident to Your Insurer - 19th Jun 18
US Majors Flush Out A Major Pivot Low and What’s Next - 18th Jun 18
Cocoa Commodities Trading Analysis - 18th Jun 18
Stock Market Consolidating in an Uptrend - 18th Jun 18
Russell Has Gone Up 7 Weeks in a Row. EXTREMELY Bullish for Stocks - 18th Jun 18
What Happens Next to Stocks when Tech Massively Outperforms Utilities and Consumer Staples - 18th Jun 18
The Trillion Dollar Market You’ve Never Heard Of - 18th Jun 18
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18

Market Oracle FREE Newsletter

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

Dow New Stock Market All time High as Greece Surrenders to Germany

Stock-Markets / Stock Markets 2015 Feb 21, 2015 - 12:40 PM GMT

By: Nadeem_Walayat

Stock-Markets

The Dow stocks index set a new all time high Friday, closing up 155 at 18,140, that actually marks the first new all time high of 2015 as the Dow more than recouped the weakness that began late December that had seen the Dow fall to a low of 17,037 by the start of February.


The mainstream financial press like lemmings immediately jumped onto the Greece deal bandwagon to explain why stocks had just hit a new all time high, this despite the fact that the Dow's climb to new all time highs had been in motion for some 3 weeks which was in the face of relentless euro-zone bearishness not just from Greece crisis negotiations which the Germans had just the day before rejected as a Trojan Horse offer and refused to budge an inch from the existing Euro 240 billion bailout terms as illustrated below, but also due to economic weakness across the euro-zone.

"The Greek letter is not clear at all, but opens immense room for interpretation. To mention the three most important points: It includes no clear commitment to successfully conclude the current programme and its falls short of a clear freeze of Greek measures. It is totally unclear how the Greek government wants to pay its bills over the coming weeks with the current shortfall in tax receipts.

This is why the letter is not in line with the last Eurogroup position. It rather represents a Trojan horse, intending to get bridge financing and in substance putting an end to the current programme. On this basis it makes no sense to start drafting a Eurogroup statement on Friday. We should aim at three things now:

First, the three institutions should carefully examine the Greek current fiscal position in relation to the letter and give us their advice, as agreed in the last Eurogroup, whether on the basis of the Greek letter a successful conclusion of the current programme would be possible, with a sufficient primary surplus and debt sustainability to be assured.

Second, we need a clear and convincing commitment by Greece, which may just contain three short and well understandable sentences: "We apply for the extension of the current programme, making use of built-in flexibility. We will agree with the institutions any changes in measures from the existing MoU. And we aim at successfully concluding the programme".

Greece Surrenders to Germany

Friday's announcement amounts to a humiliatingly near total climb down by the Syriza government as it gave up at least 80% of the demands that were being made in the face of an accelerating run on its banks. Even the 20% that it retained will likely be further whittled down over the coming week as it is clear that Germany runs the euro-zone and that despite Syriza propaganda, nothing has changed to what the Greek government can do to the state the nation was in before the January election. Therefore the ONLY option the Syriza Greek government has is to either leave the Euro-zone or continue to follow the German economic austerity medicine all the way towards completing the reform of the corrupt Greek state.

My long standing opinion is that the only workable long-term solution is for Greece to LEAVE the euro-zone, else it is a case of perpetual depression coupled with useless elections that elect government with no power to do anything as the can keeps getting kicked down the road, which in today's case is 4 months down the road when Greece will be back threatening a euro-armageddon exit.

Stock Market 2015

In terms of the prospects for the stock market, my recent in-depth analysis concluded in the following detailed trend forecast for 2015 that expected a volatile trend during the first half of the year, that in the first instance targeted a new all time high before the end of March 2015 that has already just been achieved.

The Dow resolves to a bullish Elliott Wave pattern i.e. implies that the Dow should now embark on a trend to a new all time high, probably before the end of March!

03 Feb 2015 - Dow Stock Market Trend Forecast 2015 by Nadeem Walayat

Dow Stock Market Forecast 2015 Conclusion

My final conclusion is for the Dow to spend the first half of 2015 in a wide volatile trading range as it continues to unwind the 2014 bull run and sets the scene for the next series of bull runs to new all time highs. I expect the Dow to have started its bull run by early August off of an summer low and then continue into the end of the year, punctuated by an October correction low. I further expect the Dow to be trading well above 19,000 during December 2015 and probably above 19,500, before closing at around Dow 19,150 for a 7.5% gain for the year as illustrated by the following trend forecast graph for 2015.

Dow Stock Market Trend Forecast 2015

The bottom line is don't be frightened by first half weakness, yes it may look grim if we see the Dow trading under 16k, but all it would represent is a deeper buying opportunity before the market resolves to above Dow 19k.

What's Next?

The Dow having achieved the upper end of its first half trading range, therefore the Dow should now imminently target a trend lower towards the bottom end of this trading range which at least suggests that 3 weeks from now the Dow will have traded down to at least 17,000. I am sure the lemmings that commentate on markets in the mainstream press will conclude 'after the fact' that the drop in the Dow was due the unraveling of the Greece deal as the Greek population increasingly revolts in response to Syriza failure to carry out its mandate / election promises that could even result in the Syriza government disintegrating prompting another election. Or for press focus looking for signs of Czar Putin's unconventional war spreading to the Baltic nations.

Source and Comments: http://www.marketoracle.co.uk/Article49530.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2015 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 five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 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

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


Comments

jgizzo
10 Mar 15, 12:39
Goldman doesn't see a Euro Exit

"In other words, sorry Greece: you are stuck: according to Goldman you can't go back to the Drachma, even if you wanted to."

http://www.zerohedge.com/news/2015-03-02/can-greece-just-print-drachmas-goldman-answers


Post Comment

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

6 Critical Money Making Rules