Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB
Silver's Relationship with Gold Reaching Historical Extremes - 16th Sep 18
Emerging Markets to Follow and Those to Avoid - 16th Sep 18
Investing - Look at the Facts to Find the Truth - 16th Sep 18
Gold Stocks Forced Capitulation - 15th Sep 18
Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - 15th Sep 18
Trading The Global Future - Bad Consequences - 15th Sep 18
Central Banks Have Gone Rogue, Putting Us All at Risk - 15th Sep 18
Gold Price Seasonal Trend Analysis - 14th Sep 18
Growing Number of Small Businesses Opening – and Closing – In the UK - 14th Sep 18
Gold Price Trend Analysis - Video - 14th Sep 18
Esports Is Exploding—Here’s 3 Best Stocks to Profit From - 13th Sep 18
The Four Steel Men Behind Trump’s Trade War - 13th Sep 18
How Trump Tariffs Could Double America’s Trade Losses - 13th Sep 18
Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - 13th Sep 18
Trading Cryptocurrencies: To Win, You Must Know Where You're Wrong - 13th Sep 18
Gold, Silver, and USD Index - Three Important “Nothings” - 13th Sep 18
Precious Metals Sector On a Long-term SELL Signal - 13th Sep 18
Does Gambling Regulation Work - A Case Study - 13th Sep 18
The Ritual Burial of the US Constitution - 12th Sep 18
Stock Market Final Probe Higher ... Then the PANIC! - 12th Sep 18
Gold Nuggets And Silver Bullets - 12th Sep 18
Bitcoin Trading - SEC Strikes Again - 12th Sep 18

Market Oracle FREE Newsletter

Trading Any Market

Stock Market’s Technical Strength Grows

Stock-Markets / Stock Markets 2015 Oct 26, 2015 - 05:55 PM GMT

By: Christopher_Quigley

Stock-Markets

The Continued Hollowing Out Of European Industry.

“The power of producing wealth is infinitely more important than wealth itself; it insures not only the possession and the increase of what has been gained, but also the replacement of what has been lost.” Freidrich List "The National System of Political Economy"

I always believed the above quote by Freidrich List and I could never understand the modern politician’s obsession with “free trade”.


When Ireland joined the European Union in the early 1970’s it was forced to drop major import tariffs. Accordingly, over a generation practically 80% of “native” industrial production ceased, laid waste by cheap European imports. I always remember Frank Kenny a 65 year old Dublin gentleman tearfully tell me in 1995 that he was forced to close his 3 generation old suit tailoring factory due to inferior imports from Italian producers. He felt ashamed that this “failure” occurred on his watch. When he visited one of these Italian factories in Milan he discovered that European trade law allowed these Italian producers export anywhere throughout the EU, including Ireland, provided a certain percentage of the product was produced in Europe. My friend enquired how much of the garments produced in Milan were Italian: “the label alone” he was cynically informed. It turned out “the balance” was produced in a sweat shop in the Far East, branded with a pure silk label and marketed as the finest in European tailoring.

The bush fire that is “free- trade” continues its destructive force in Ireland and Europe as we speak. Only last month, to much public consternation, one of the last remaining steel manufactures in the UK was forced to close. This was  mainly due to China dumping cheap steel onto the European market as a result of a collapse in its “home” market. The Guardian newspaper had this to say on the 28th. September 2015:

“Britain’s Redcar steel plant to close with 1,700 job losses.
One of the UK’s biggest steelmaking plants, at Redcar on Teesside, is to stop production after nearly 100 years, with the loss of 1,700 jobs.
The plant’s owner’s said that after reviewing the business it had no choice but to mothball the operations. Management had put production on hold ten days ago ahead of a final decision on its future. Coke ovens and a power station at the site would continue to function, it said.

Falling steel prices for its decision to close the blast furnace, the second-biggest in Europe. The company said it would talk to the government about reopening in the future but this was unlikely in the short term. The steel industry and trade unions called on the government to intervene.

Cornelius Louwrens, the steel plant’s  UK chief operating officer, said: “I think this is devastating. There’s no words you can use which would be overstating it.”
He added: “This is an extremely sad day for all of us at Redcar, and in particular our employees and their families. Together with our parent company and the various other stakeholders, they have worked so hard in their endeavours to try and make this business successful. Market conditions this year have been extremely challenging and unfortunately this has led to the decision we are announcing today.”

The plant, on the banks of the river Tees on the outskirts of Middlesbrough, is 98 years old and its steel has been used to build the Sydney harbour bridge and New York’s One World Trade Center. Campaigners in Redcar, where unemployment is high, had warned that a shutdown would mean many thousands more jobs will be lost from nearby businesses.

Steelmakers last week urged the government to rescue the industry by cutting green taxes and banning cheap imports that have pushed prices to levels that made UK plants unviable. The industry said the government now needed to do more to support the sector, including stopping the dumping of cheap steel from China and cutting business rates”.

Why enlightened European leaders allow Chine get away with such practices amazes me? The only way I can see wide-spread manufacturing returning to Ireland, England and Europe is through the re-introduction of protective tariffs. The insights of Freidrich List need to be more widely taught and understood among students of economics and the destructive pro-China policy, which is destroying Western capitalism, must be altered before it is too late.

Market’s Technical Strength Grows.
The rebuilding of the technical strength of the market since its collapse in August 20th has been astonishing. I did not expect this development but as always one must leave personal sentiment aside and listen to the truth of price action.

Currently the market is oversold and a correction is on the cards. However, given the recent strength of such companies as Amazon, Google (now Alphabet) and Microsoft it is well within the bounds of probability that new highs will be reached on the Dow by year end, thus reversing the Dow Theory sell signal received in January and confirmed during the summer.

Clearly the market is now beginning to accept that the FED will not raise interest rates until well into 2016. The only “fly in the ointment” is the fact that the NYSE A/D line is still bearish but this situation could change if technology continues to report strong growth, mitigating the effect of the strong dollar on international earnings.

Chart: Dow Industrials: 26th. October 2015: Daily.



Chart: Dow Transports 26th. October 2015: Daily.


Chart: NYSE A/D Line 26th. October 2015: Daily.



Chart: Amazon.Com Inc. 26th. October 2015: Daily.


Chart: Goog (Alphabet Inc.) 26th. October 2015: Daily.


Chart: Microsoft Corp. 26th. October 2015: Daily.

Reference:
Freidrich List: "The National System of Political Economy"

Charts courtesy of Worden Bros.

By Christopher M. Quigley

B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin, Ireland. He holds a Bachelor Degree in Accounting and Management from Trinity College Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the stock market in 1989 in Belmont, California where he lived for 6 years. He has developed the Wealthbuilder investment and trading course over the last two decades as a result of research, study and experience. This system marries fundamental analysis with technical analysis and focuses on momentum, value and pension strategies.

Since 2007 Mr. Quigley has written over 80 articles which have been published on popular web   sites based in California, New York, London and Dublin.

Mr. Quigley is now lives in Dublin, Ireland and Tampa Bay, Florida.

© 2015 Copyright Christopher M. Quigley - 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 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.

Christopher M. Quigley Archive

© 2005-2018 http://www.MarketOracle.co.uk - 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