Saturday, August 20, 2011
More Weekend Reflections from Market Oracle UK
Ian Gordon, economic forecaster and chair of the Longwave Group: The majority of gold investors are there because they can see the impending collapse of paper money, but some investors, including many hedge funds, are in the gold market simply because they are trend-followers. In ugly markets, such as the one now unfolding, these trend-followers sell their gold. During the stock bear market, which commenced in October 2007, the price of gold continued to rise into March 2008, even though the Dow had lost about 17.5% from October 2007 to March 2008. But after March, gold sold off into October 2008, losing about 35% of its value. We feel that something similar could happen to gold, this time, in the wake of falling stock prices. As for silver, prices fell by 60% between March 2008 and October 2008. A 35% drop from current prices would see the price of gold fall to something like $1,200/oz. As for the stock market, we are extremely bearish and believe that in the Elliott Wave market cycles, we are entering the third downswing, which should take the Dow Jones Industrial Average well below the March 2009 low of 6,470; perhaps 4,500 will be the target by September 2012.
Weekend Reflections - Market Oracle UK Post
Bull/Bear Market
Nadeem, I have been reading your work over the last couple of years, and I have to acknowledge your work is indeed very good. Over paid Economists the world over are raking the moolah with forecasts that are a great deal away from the line of best fit, but I dont blame them at all, given that academics are unwilling to admit that external events (except acts of god and other catastrophes) do not move markets. Bernanke probably does (or atleast the crowd believes so), but in 4 weeks, all of his genius work and therefore, the stock market's post QE2 gains have been completely wiped out in 1/10th (maybe even lesser) of the time. I remember how he adorned the cover page of TIME as man of the year, and I am a great believer in Robert Prechter's Magazine cover extreme. Since then it has been downhill for him and the Fed. Its not the Fed's business to support stock markets, and if it is, they should probably put it on record so people know. History is replete with examples of the market rendering "interventions" absolutely impotent. The latest is the USDJPY episode. You might help create a bounce in the larger scheme of things, only for the worse to snowball into something that no regulator can handle. In this background, let us make an effort to acknowledge different opinions rather than tearing somebody else's arguments to shreds (Read: Mish). The one thing about Robert Prechter that is particularly likeable is that he has never shied away from accepting his mistake. I follow him very closely, and whatever he did recommend, he's always had stops. Always. Here again, I hope he is wrong with his dow 1k forecast, but there is nothing that the market can't do, and am sure with your experience, you know that a lot better than I do. On a final note, am not sure if you follow David Rosenberg of Gluskin Sheff and he's not scared to be a bear. In a bear market, you just cannot be a bull. The great thing about a good technical analyst is to swap sides when the trend turns, and not just be bullish because a bull gets called to studios more often. Having said that, keep up the good work.
Submitted by a guest commentator
Nadeem, I have been reading your work over the last couple of years, and I have to acknowledge your work is indeed very good. Over paid Economists the world over are raking the moolah with forecasts that are a great deal away from the line of best fit, but I dont blame them at all, given that academics are unwilling to admit that external events (except acts of god and other catastrophes) do not move markets. Bernanke probably does (or atleast the crowd believes so), but in 4 weeks, all of his genius work and therefore, the stock market's post QE2 gains have been completely wiped out in 1/10th (maybe even lesser) of the time. I remember how he adorned the cover page of TIME as man of the year, and I am a great believer in Robert Prechter's Magazine cover extreme. Since then it has been downhill for him and the Fed. Its not the Fed's business to support stock markets, and if it is, they should probably put it on record so people know. History is replete with examples of the market rendering "interventions" absolutely impotent. The latest is the USDJPY episode. You might help create a bounce in the larger scheme of things, only for the worse to snowball into something that no regulator can handle. In this background, let us make an effort to acknowledge different opinions rather than tearing somebody else's arguments to shreds (Read: Mish). The one thing about Robert Prechter that is particularly likeable is that he has never shied away from accepting his mistake. I follow him very closely, and whatever he did recommend, he's always had stops. Always. Here again, I hope he is wrong with his dow 1k forecast, but there is nothing that the market can't do, and am sure with your experience, you know that a lot better than I do. On a final note, am not sure if you follow David Rosenberg of Gluskin Sheff and he's not scared to be a bear. In a bear market, you just cannot be a bull. The great thing about a good technical analyst is to swap sides when the trend turns, and not just be bullish because a bull gets called to studios more often. Having said that, keep up the good work.
Submitted by a guest commentator
Friday, August 19, 2011
Now is a Good Time to Get Out of the Market
Today's action confirms the Stock Trader's Almanac pattern; i,e. the market should be weak into August 30, a rally possibly into September 4, and a really shocking drop into October/November.
I'm already out, so I'm not stressing anymore.
But the downtrend on the weekly chart is strong. A close below 1130 will seal the deal for more downside next week. My target on the S&P 500 Index (and it is hard to believe) is about 970. It could happen either by August 30 or by October/November.
Anyway, now is a good time to get out of the market. The move down is very strong. Bounces are being sold with vigor.
Your standing on the sidelines writer,
Wink
I'm already out, so I'm not stressing anymore.
But the downtrend on the weekly chart is strong. A close below 1130 will seal the deal for more downside next week. My target on the S&P 500 Index (and it is hard to believe) is about 970. It could happen either by August 30 or by October/November.
Anyway, now is a good time to get out of the market. The move down is very strong. Bounces are being sold with vigor.
Your standing on the sidelines writer,
Wink
Thursday, August 18, 2011
100% in the G Fund - The Bounce Has Died
The bounce has died. I am 100% in the G Fund. We hit the 13-day moving average and then dived down. It is time to go.
The market has changed. Support has been breached @ 1172. Support shouldn't be breached if we are heading up. Also, we are now below the 200-day moving average on a weekly chart. Time to go and step aside. I found myself hoping. Hope is not a plan.
Breaching 1172 support was a trigger. Breaching the 200-day moving average on a weekly chart was a trigger.
October/November should offer better entry opportunities. It's just not a good market environment. Plus, there is less stress to just step aside and watch from the sidelines.
The market has changed. Support has been breached @ 1172. Support shouldn't be breached if we are heading up. Also, we are now below the 200-day moving average on a weekly chart. Time to go and step aside. I found myself hoping. Hope is not a plan.
Breaching 1172 support was a trigger. Breaching the 200-day moving average on a weekly chart was a trigger.
October/November should offer better entry opportunities. It's just not a good market environment. Plus, there is less stress to just step aside and watch from the sidelines.
Friday, August 12, 2011
Let It Be
"When I find myself in times of trouble, Mother Mary comes to me,
Speaking words of wisdom, let it be
And in my hour of darkness, she is standing right in front of me,
Speaking words of wisdom, let it be.
Let it be, let it be, let it be
Whisper words of wisdom, let it be."
---written by Paul McCartney
The close today was higher than the open. The MACD Histogram is rising. The daily stochastics are coming out of oversold conditions. The week closed higher than it opened with a long-tailed doji. Next week is options expiration week. The moving averages are overhead.
Let it be.
Speaking words of wisdom, let it be
And in my hour of darkness, she is standing right in front of me,
Speaking words of wisdom, let it be.
Let it be, let it be, let it be
Whisper words of wisdom, let it be."
---written by Paul McCartney
The close today was higher than the open. The MACD Histogram is rising. The daily stochastics are coming out of oversold conditions. The week closed higher than it opened with a long-tailed doji. Next week is options expiration week. The moving averages are overhead.
Let it be.
Thursday, August 11, 2011
Market Opportunity Moment
We are in an outstanding market moment right now. Remember, buy low sell high.
Well, the market is going higher right now. It passed the Thursday, August 11, 2011 test. So, if you were thinking about going long, now is the time before the market close (1:00 EST). As I mentioned in an earlier post, tomorrow should be a dickens of a rally. Same for Tuesday, August 16.
Why am I confident that the market is going higher?
There are several reasons.
First, the market was gravely oversold. I have not seen the market this oversold since the bottom in March 2009 and October 2008 bottoms. Even if we are bearish long-term, bear markets can offer epic rally opportunities for profit.
Second, the probabilities favored a low today. When the market kept rising into the final hour of the trading day, that was the signal to go long. Yes, it was.
Third, retail people were scared on Monday and Tuesday. They were crazy scared if you looked at the daily Trin readings. I could see the money just coming out of the market. That created a buying opportunity but you had to trust your signals; i.e. that even if the world is falling apart and the nightmare is upon us, the market will return to overhead moving averages. It just does. When you place your faith in overhead moving averages, then you have the stomach to weather the dramatic falls in the market.
Fourth, if you simply followed your emotions and feelings, you would have sold early this week or late last week. I may discount Jim Cramer but he is on the mark when he says that a panic is the worst time, the absolute worst time, to sell. You have to just forget about the market during a crash, think of something else, and know that the overhead moving average will not be denied.
Finally, we are in the last hour of the trading day as I type. Smart money is at work right now!!! Imagine how fearful the shorts are....They know what is coming tomorrow. I know what is coming tomorrow. (Thank you, Stock Trader's Almanac). The market keeps rising and shorts keep covering. I can feel the upward momentum in the market. This upward move is not false like we saw on Tuesday. This move is for real.
In short, opportunity is a powerful force! I believe that. Right here, right now, we are in a moment of historic opportunity. May we all enjoy the upward climb to the heavenly embrace of overhead moving averages. (OMG, the market is now @ 1180 and keeps going up!! These are the times when traders make their year.)
Your too excited market analyst,
Wink
Well, the market is going higher right now. It passed the Thursday, August 11, 2011 test. So, if you were thinking about going long, now is the time before the market close (1:00 EST). As I mentioned in an earlier post, tomorrow should be a dickens of a rally. Same for Tuesday, August 16.
Why am I confident that the market is going higher?
There are several reasons.
First, the market was gravely oversold. I have not seen the market this oversold since the bottom in March 2009 and October 2008 bottoms. Even if we are bearish long-term, bear markets can offer epic rally opportunities for profit.
Second, the probabilities favored a low today. When the market kept rising into the final hour of the trading day, that was the signal to go long. Yes, it was.
Third, retail people were scared on Monday and Tuesday. They were crazy scared if you looked at the daily Trin readings. I could see the money just coming out of the market. That created a buying opportunity but you had to trust your signals; i.e. that even if the world is falling apart and the nightmare is upon us, the market will return to overhead moving averages. It just does. When you place your faith in overhead moving averages, then you have the stomach to weather the dramatic falls in the market.
Fourth, if you simply followed your emotions and feelings, you would have sold early this week or late last week. I may discount Jim Cramer but he is on the mark when he says that a panic is the worst time, the absolute worst time, to sell. You have to just forget about the market during a crash, think of something else, and know that the overhead moving average will not be denied.
Finally, we are in the last hour of the trading day as I type. Smart money is at work right now!!! Imagine how fearful the shorts are....They know what is coming tomorrow. I know what is coming tomorrow. (Thank you, Stock Trader's Almanac). The market keeps rising and shorts keep covering. I can feel the upward momentum in the market. This upward move is not false like we saw on Tuesday. This move is for real.
In short, opportunity is a powerful force! I believe that. Right here, right now, we are in a moment of historic opportunity. May we all enjoy the upward climb to the heavenly embrace of overhead moving averages. (OMG, the market is now @ 1180 and keeps going up!! These are the times when traders make their year.)
Your too excited market analyst,
Wink
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