Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

G7 Economies Turn Into Wealth Sucking Black Holes- Opportunities in Emerging Countries

Stock-Markets / Stagflation Feb 23, 2008 - 07:55 AM GMT

By: Ty_Andros

Stock-Markets Best Financial Markets Analysis ArticleVolatility continues to expand at a blistering pace, wonderful isn't it? Volatility is opportunity for the prepared investor . This week's missive will be a little shorter than most as I have had a very bad flu. A number of markets are tipping their hands signaling another round of re-pricing in many markets, further signaling abundant opportunities DEAD ahead. We will cover a few here today. Next week we will address why commodities are not in a bubble in a definitive way - don't miss it ! Global Decoupling is still proceeding; it is just navigating a rough patch. You can see its outline clearly.

I am going to cover the market tea leaves today, it's an interesting picture. We are going to cover the S&P 500 which is coiled like a spring and doing something which it rarely does. Then we are going to migrate to interest rates, gold and crude oil, then give you a peek at the next shoe to drop in emerging FEAR. Fear is wonderful for investors as it drives prices which create opportunities for invest. I love the word FEAR; it's an acronym if you didn't know: FALSE EVIDENCE APPEARING REAL! When it emerges markets MOVE fast!

First up is the analysis of the S&P 500 which is in the process of doing something it has only done 4 times in the last 10 years and 6 times in the last twenty years. It is coiled like a spring and when it breaks out of this pattern it is going to run like deer. Let's look at the pattern:

S&P 500

When we break out of this pattern it will signal a move of 160 S&P points in the direction of the breakout, a 13% move . This is a clean and easily identified pattern, and what is most interesting is that we are working on the second inside week in a row.

This is something which has only happened 4 times in the last 10 years and 6 times in the last 20 years!

As you can see, the oversold nature of the previous decline has been completely relieved and we are knocking on the down elevator. The bottom of the previous week's action is 1320 and 1370 on the topside. Big volume on down days and small on rallies. Furthermore, the lower trend line is breaking down as I write this, can you say “BOMBS AWAY?” Once price penetrates one of those levels we should see an impulse as market participants who are wrongly positioned will be forced to liquidate and power the move in the direction of the breakout, not to mention the technical traders who will enter the fray at that point.

10 Year Notes

Now let's examine a few other interest rate markets which are giving us an idea that the move out of the pattern is going to be down! First let's look at the Ten year note which is profoundly signaling NEGATIVE interest rates. This week the “official” CPI came out and the year over year gain was approximately 4.2%, including food and energy (authors note: What a laugh, it is really 3 times that, see ), currently the 10 year note yields 3.76% as I write this, subtract taxes from the yield and the confiscation of purchasing power in this supposedly RISK free asset is readily apparent. Risk free? NOT. If you are buying treasuries, give it a lot of thought.

These certificates of confiscation are fraught with risk, if you really believe, as I do, that REAL inflation is running at about 12% or more. Then when they re-price to reflect true market conditions it could be a BANG heard around the world. Talk about the potential for CAPITAL losses.

his market is tightly wound as well. Break higher through that trend line and you can expect a solid rally and a continued move towards lower rates. Why should we believe this trend line will be broken? Let's look at the next shoe to drop in the credit crisis: Credit default swaps (insurance policies) of investment grade companies and then the CMBX commercial real estate indexes of those pesky securitized commercial real estate loans!

The temperature is rising in these indexes as well as the price for coverage. The credit default swap market is suspect itself and counter party risk is extreme – primarily because knowing who holds the other side of the trade is virtually impossible.

This is an index of securitized commercial real estate loans:

Can you say “freefall since early February?”, as are all the credit indexes outlined. So we can surmise that those TEN year notes are about to move higher SOON! Money creation is still going gangbusters as reconstructed M3 is running at over 15%. Fannie Mae and Freddie Mac are reporting next week and IT WON'T BE PRETTY!

Dennis Gartman, of the , is reporting that 32 billion dollars have exited the stock market since the beginning of February, yesterday's Philly Fed was a bomb at negative -25, unemployment is averaging -360,000 (4 week average), and the ABC/Washington Post survey of consumer confidence is at 15 year lows. Can you say: “Print the money, fast?” Rates are headed lower FAST! They can do nothing else.


Countries which use currency pegs are importing huge amounts of STIMULUS and inflation into economies which are GROWING! They are essentially placing superchargers to growth on these emerging economic powerhouses of Austrian Economics . These pegs are doomed to failure sooner or later. The economies of the G7 is not growing and are now wealth sucking black holes of capital (ALL PRINTED OUT OF THIN AIR), while the emerging world and resource economies are doing quite nicely!


So we are now seeing gold make its move in its ongoing journey higher, pricing in the ongoing fire hoses of money printing whatever is required to underpin the G7 financial systems. Once again it has created a pennant and the diamond formation signaling the continuation of the trend resumption after the consolidation pattern, just as it has done for YEARS!

Pattern after pattern after pattern signaling the next leg has probably begun. Slow Stochastic's and MACD are on buy signals, and the ADX trend gauge has turned higher signaling a resumption of the trend. There are three patterns in this chart and they have all broken out (or are breaking out NOW) and point HIGHER! This makes sense as money creation is still running at plus 15%. Now let's look at crude oil as it is on the cusp of a move $15 dollars higher which would also confirm the action we see in the gold chart!

Crude Oil

Notice the similarity of the Gold and Oil charts? These ARE NOT pictures of a top! They are pictures of a broad consolidation period with a war on the floor happening at $100 dollars in Oil and $950 in Gold. There are HUGE shorts up there, and once through it you can look for an impulse higher as the shorts cover and new buyers buy the breakout from the consolidation pattern.

This confirms price action as new highs in price are echoed by the internals heading to new highs as well. The ADX trend gauge is at 27, and once through 30 it will resume the primary trend time again. Could it back and fill another time? Of course it could. But once through those highs and a weekly close up there the fireworks will begin again. If crude oil moves 15% you can expect gold to do so as well….


In conclusion: The tea leaves all are singing in a chorus what to expect, keep them in mind as the markets are tipping their hands as to what to expect via price. Once again, THERE IS NO SHORTAGE OF CASH, only a shortage of confidence. The tsunami of WORLDWIDE money creation is still occurring, only its destinations have been changed and you can see this in market prices. Wall Street and London are losing the confidence of their customers.

The “Crack up Boom” is unfolding as predicted by Von Mises. It's hard to predict a down stock market when they are printing money at this rate! Purchasing power is crumbling in terms of all currencies which provide a natural buoyancy as the assets re-price higher to reflect the lower purchasing power of the currencies in which they are priced! Can you say “ Zimbabwe here we come?”

Washington DC , the Federal Reserve, the Bank of England and the ECB are in full battle mode, taking the liquidity requirements of the financial systems onto their balance sheets. Treasury secretary Hank Paulson, Helicopter Ben Bernanke, Mervyn King, Jean Claude Trichet and Alistair Darling are all playing fire fighters. A blistering essay outlining DOOM has made the rounds of the financial cognoscenti, courtesy of Dr Doom himself Nouriel Roubini! I know it scared the pants off me! Will we see fireworks as they sort through his dirty laundry list? Yes. Those runs on the credit indexes began when his missive HIT THE STREETS! Will the financial authorities and the Public Serpents, er Servants let their biggest money constituents, cash cow financial industries and their political careers be destroyed on the rocks of a depression. I DOUBT IT!

The Mandarins in Washington , London and Brussels stand at the ready to meet any funding requirements to prevent systemic financial system failure. Discussions are firmly in place to rescue the banking systems if necessary . Roubini's laundry list serves one BIG purpose, it gives them issues to think about when preparing to deal with the problems so they can anticipate problems, not be surprised by them. As we have said: THEY WILL PRINT THE MONEY! And they are doing so on a daily basis. You can count on it! These people are NOT suicidal. A gun is pointed at their heads and you can rest assured: THEY WILL DUCK! It is predictable. You can invest with this firmly in mind.

The TAF (Temporary Auction Facility) widened further and took in another $50 billion dollars of near worthless asset backed securities of one sort or another last week, and non-borrowed reserves spiked accordingly. This exercise of G7 financial system rescue has only just begun . The President's working group on markets known as the Plunge Protection Team are hard at work. Roubini predicts a Trillion dollars of losses and I concur!

So it's man the keyboards and start the presses, as we work our way through the issues outlined by Roubini and the WOLF WAVE, detailed in the Tedbits 2008 Outlook series, it sets us up for quite a THRILL RIDE! (See the four part 2008 Outlook series, aka “THRILL RIDE” at ) This is setting up for lots of FUN isn't it? You need to short circuit the printing presses. THESE ARE HUGE OPPORTUNITIES. Are you prepared to capitalize on them rather then be a victim of them?

If you enjoyed this edition of Tedbits then subscribe – it's free , and we ask you to send it to a friend and visit our archives for additional insights from previous editions, lively thoughts, and our guest commentaries. Tedbits is a weekly publication.

By Ty Andros
Copyright © 2008 Ty Andros

Hi, my name is Ty Andros and I would like the chance to show you how to capture the opportunities discussed in this commentary. Click here and I will prepare a complimentary, no-obligation, custom-tailored set of portfolio recommendations designed to specifically meet your investment needs . Thank you. Ty can be reached at: or at +1.312.338.7800

Tedbits is authored by Theodore "Ty" Andros , and is registered with TraderView, a registered CTA (Commodity Trading Advisor) and Global Asset Advisors (Introducing Broker). TraderView is a managed futures and alternative investment boutique. Mr. Andros began his commodity career in the early 1980's and became a managed futures specialist beginning in 1985. Mr. Andros duties include marketing, sales, and portfolio selection and monitoring, customer relations and all aspects required in building a successful managed futures and alternative investment brokerage service. Mr. Andros attended the University of San Di ego , and the University of Miami , majoring in Marketing, Economics and Business Administration. He began his career as a broker in 1983, and has worked his way to the creation of TraderView. Mr. Andros is active in Economic analysis and brings this information and analysis to his clients on a regular basis, creating investment portfolios designed to capture these unfolding opportunities as the emerge. Ty prides himself on his personal preparation for the markets as they unfold and his ability to take this information and build professionally managed portfolios. Developing a loyal clientele.

Disclaimer - This report may include information obtained from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made to ensure its accuracy or completeness.  Opinions expressed are subject to change without notice.  This report is not a request to engage in any transaction involving the purchase or sale of futures contracts or options on futures.  There is a substantial risk of loss associated with trading futures, foreign exchange, and options on futures. This letter is not intended as investment advice, and its use in any respect is entirely the responsibility of the user. Past performance is never a guarantee of future results.

Ty Andros Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


lynne Moffett
25 Feb 08, 15:50
investing in chaotic economic times

interesting writing style ------ very readable, and i agree with so much of the piece.

Post Comment

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