Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Why APPLE Could CRASH the Stock Market! - 21st May 22
Why Is Crude Oil Ignoring US Inventories? - 21st May 22
Here is Why I’m Still Bullish on Gold Mining Stocks - 21st May 22
THE INFLATION MEGA-TREND QE4EVER! - 20th May 22
US Real Estate Investors – Is There An End In Sight? - 20th May 22
How Technology Affected the Gaming Industry - 20th May 22
How To Set And Achieve Reasonable Goals For Your Company - 20th May 22
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Bear Counter Rally Continues

Stock-Markets / Stock Markets 2016 Mar 16, 2016 - 12:40 PM GMT

By: Christopher_Quigley

Stock-Markets

Europe continues to disintegrate politically.
On the  26th of February the Irish people went to the polls in a general election. Nearly 3 weeks later a government has not been formed due to the fact that no main party won an outright majority. It looks like this instability will remain for at least another month or so. Spain went to the polls 3 months ago and still no government has been voted in. Belgium was unable for 541 days to form a government, following its general election in 2010.


In his recent book “The End of Alchemy: Money, Banking and the Future of the Global Economy” Mervyn King, the former governor of the Bank of England, commented upon the phenomenon of lack of political stability in Europe. In his opinion the shift to the left away from main stream political parties was due to one factor and one factor alone: the Euro. Here is what Cormac Lucy of the Sunday Times had to say concerning Mr. King’s thesis:

“By applying a common interest rate where diverse rates are required, the Euro alternately stokes national inflation and deflation in. This puts huge strain on the political systems of those countries affected. So we have seen political revolts in Greece, Spain, Italy and Portugal, where parties that have dominated national politics for decades have been serially humiliated.

Popular disillusionment with the EU economic policies is more likely to lead to the disintegration of the single currency than towards fiscal union, the goal beyond monetary union.

Ireland faces a profound choice between staying within the Euro and exiting it. Mervyn King says that the weakest eurozone members face little choice but to return to their national currencies as the only way to plot a route back to economic growth and full employment…
the long-term benefits far outweigh the short-term costs.

The most telling aspect of Ireland’s post-election aftermath has been the silence regarding the role of the Euro in Ireland’s political convulsions and the silence over what King is now publicly saying. Instead of grappling with the causes of the crisis, we focus resolutely on its symptoms and consequences, neither of which is in short supply.”

In my opinion as long as European leaders maintain a denial mentality regarding the Euro, Europe will continue to sleep-walk into economic catastrophe. As long as the real issue behind economic stagnation is ignored the greater will be the divergence between the world of the bureaucrats and reality of main street. Failure to form governments is a manifestation that this de-coupling is growing in complexity and seriousness. History has shown that systemic political failure is the mother of social dysfunction, revolution and eventually civil war. The last thing the world needs now is a return to the failure of past European experience. We must hope that courageous leadership develops in Brussels which ends the spell of current mental sophistry. What is needed is a detailed formula, an agreed plan, a consensus if you will,  to formally allow members of the failed  Eurogroup to revert back to national currencies in an orderly manner. If it is left too late circumstance will dictate events and instead of management and control; strife, stress and social dislocation will be the order of the day, and we all know where that may lead.

Bear counter rally continues.
The Bear counter, rally which commenced on the 11th. and 12th. of February, continues as we speak though all eyes as usual are on the FED.

Both the Dow Industrials and the S & P 500 are on the cusp of breaking through their 200 DMA, with the NASDAQ not too far behind. So far so good. Should Janet Yellen keep interest rates on hold it is conceivable that markets will reach December highs.

However, I would advise caution. The counter rally is beginning to lose steam. The VIX is back down to the lower levels of its trading range which indicates that a pullback can occur at any time. In a bear configuration such contractions can get ugly very quickly, wiping away short-term gains. Hard sell stops are advised.

Happy St. Patrick’s day to everyone.

Chart: Dow Industrials: Daily.

Chart: S & P 500: Daily.

Chart: NASDAQ: Daily

Chart: VIX: Daily.

Charts courtesy of StockCharts.Com

Christopher Quiqley

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.

© 2016 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

© 2005-2019 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