Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Is the Debt Fuelled Economic Recovery Sustainable?

Stock-Markets / Financial Markets 2009 Oct 31, 2009 - 06:27 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleThe U.S. Economy bounced backed strongly in the third quarter, following Euro-zone second quarter recovery which is not so surprising given the amount of debt fuelled economic stimulus spending. Britain lags behind awaiting its bounce back in the fourth quarter due to the relative size of its financial sector.


Is the economic recovery sustainable ? Normalisation of the worlds economies from the economic free fall stage implies gradual withdrawal of unprecedented stimulus measures such as zero interest rates, deficit spending and quantitative easing, which means many negative measures will be adopted to fill the fiscal gaps, i.e. spending cuts and tax rises. This implies forward economic weakness for some countries more than others i.e. those that lack a manufacturing base which have basically funneled their stimulus into consumption of overseas manufactured products, which again puts Britain at the top of the list to suffer a double dip recession.

In the immediate future the UK government is going to continue to burn more money into the next general election which will set Britain up for deep second recession during 2011, as out of control perpetual money printing risks an eventual currency crash into hyperinflation so is NOT an option. A lot now hinges on whether the post 2010 election government has the will to put Britain onto a path of REAL economic recovery i.e. will we get a strong Thatcher-esk government or another dithering incompetent Brown-esk government.

Financial Markets

Stock Market volatility surged during the week with wild gyrations pushing stocks to the low for the week which brings the trend to a similar amount in points terms as the earlier down trend into the start of October. Meanwhile the U.S. Dollar clawed its way back above USD 76 keeping the USD bull market scenario alive, whilst Gold ended a little lower on the week, all three trends were inline with last weekends quick analysis. I will cover stocks, gold and the dollar in depth in Sunday's special newsletter as it is not possible to arrive at a quick take on especially stocks and gold. Ensure your subscribed to my free newsletter.

Some good news for Market Oracle readers, we are in the process of securing timely FREE access for our readers to Robert Prechter's premium financial markets forecasting services by mid next week, the details of which we will update by email so again ensure your subscribed to our free newsletter.

The plan is to include, Robert Prechter's Latest Elliott Wave Theorist issue, New Financial Forecasts Issue, and Three issues of his short-term updates. All for FREE without obligation to purchase.

Trading Lesson - Get in Synch with the Market

In our fast paced computer age of easily placed online stop and limit orders across a multitude of markets has meant that traders like never before have removed themselves from the price action where the focus is invariably on the latest indicator, tool or theory to analyse what will happen next rather than spending time actually watching and imprinting the price action in real time onto ones brain.

Not so long ago market charts had to be drawn by hand, this meant that one was forced to stay focused on the price action as it unraveled before one which generates greater FOCUS for one is more in tune or in synch with the market i.e aware of the changing character of the market which can warn of a significant imminent market moves, instead traders today are immersed in countless indicators that distract them from the market price into a state of confusion as if the phrases of convergence and divergence to the price carry's any real meaning, which is ever only clear in hindsight.

I suggest that if you really want to learn to trade then forget about using the computer generated charts, you need to draw these by hand, add trendlines and support resistance levels and nothing more, do this in real time so the most appropriate time frame would be the hourly chart. Yes this means you only trade one market at a time, but that is how it should be!

As you actually watch and interpret price action for your single market in real time, you will gain new insights into its character and changing behaviour and get in synch with the market, something you will not gain from any indicator, all of which distance one from the unfolding price action by introducing far too much complexity in its interpretation. Example of being in synch with the market.

Source: http://www.marketoracle.co.uk/Article14675.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Featured Analysis of the Week

Most Popular Financial Markets Analysis of the Week :

1. The War on the U.S. Dollar

By: Martin_D_Weiss

Last week, I showed you the most shocking numbers I’ve seen in my lifetime:

Up until the day Lehman Brothers collapsed in September of last year, it took the Fed 5,012 days — 13 years and 8 months — to double the cash currency and reserves in the coffers of U.S. banks.

Read Article

2. The Global Debt Crisis is Destroying the Economic Structure

By: Bob_Chapman

Last week Federal Reserve credit declined $12.9 billion, up 21% yoy. Fed foreign holdings of Treasury/Agency debt rose $4.1 billion to a record $2.865 trillion. Custody holdings for foreign central banks expanded at a 17.5% rate ytd, and yoy 15.2%.

M-2 narrow money supply fell $23.3 billion to $8.341 trillion, that is 5.9% yoy.

Read Article

3. Financial Markets Waiting to Change Direction?

By: Nadeem_Walayat

Britain's Great Depression caught the mainstream commentators and academic economists off guard (again), as the UK economy failed to grow by 0.2% in the third quarter as widely expected but rather contracted by another 0.4%. However the trend remains inline with my analysis and forecast of February 2009 that called for a low in the third quarter of 2009 followed by a small increase in GDP for the fourth quarter of 2009.

Read Article

4. The Elements of Deflation and Surviving Today's Economic Depression

By: John_Mauldin

What's a Fed to do? We get talk about tightening and taking away the easy credit, but we got the fourth largest monetization on record last week. This week we examine the elements of deflation, look at some banking statistics that are not optimistic, and then I write a reply to my great friend Bill Bonner about why it's the best of times to be young. I think you will get a few thought-provoking ideas here and there.

Read Article

INO TV - Watch From Your Computer for FREE

INO TV - Watch From Your Computer for FREE

Here are the newest authors: Jack Schwager, John Murphy, Jake Bernstein, and Ron Ianieri. All experts, all well recognized, and highly trafficked by our current members. http://tv.ino.com/

 

5. Financial Crisis Hidden History, The Warning Frontline Video

By: Michael Kirk

In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

Read Article

6. Civilisation Sweeping Towards Destruction, Economics Needs Moral Courage

By: LewRockwell

It must be really painful to be an economist of the mainstream today, or, at least, it should smart to some extent. In a financial and economic calamity of the current scale, people naturally want to know who issued the warnings about the real estate bubble and its likely aftermath.

Read Article

7. Financial Markets Wedge Patterns Everywhere Means All Stocks May Sink

By: Garry_Abeshouse

This is a follow on to my October 13th 2009 posting , British Pound A Major Disaster Just Waiting to Happen? and my market update on October 19th, and deals with the markets as they stood as of last trade Friday October 23rd.

Read Article

Subscription

You're receiving this Email because you've registered with our website.

How to Subscribe

Click here to register and get our FREE Newsletter

About: The Market Oracle Newsletter


The Market Oracle is a FREE Financial Markets Forecasting & Analysis Newsletter and online publication.
(c) 2005-2009MarketOracle.co.uk (Market Oracle Ltd) - The Market Oracle asserts copyright on all articles authored by our editorial team. Any and all information provided within this newsletter is for general information purposes only and Market Oracle do not warrant the accuracy, timeliness or suitability of any information provided in this newsletter. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We recommend that independent professional advice is obtained before you make any investment or trading decisions. ( Market Oracle Ltd , Registered in England and Wales, Company no 6387055. Registered office: 226 Darnall Road, Sheffield S9 5AN , UK )


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

John Bingham
01 Nov 09, 10:14
Question for Nadeem Walayat

Nadeem your thoughts on the markets have been very interesting, not to mention prescient, over the past few months.

I do however struggle to reconcile your multi year bull market thesis with the apparent end of the super credit cycle which drove the jobless recoveries in 91 and 03. There is a strong argument that growth our of debt is seriously impaired for now which begs the question where does the bull come from. Is it simply an expression of inflation?


Nadeem_Walayat
01 Nov 09, 11:14
Stealth bull market

HI

I am working on an update, will send out in a few hours.

I focus on the technicals, the fundemntals are only clear in hindsight.

Remember March when we were told stocks could not rally because of corporate earnings forecasts and that the low would come in early 2010. What happened ?

NW


Post Comment

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