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« Election Correction is On! | Main | Neely vs Prechter Redux »

Sunday, December 17, 2006

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EN

It is a real saving grace then that Prechter was so bullish on gold and other commodities during the entire bull market run-up and advised everybody to convert their cash to hard assets back in 2001, LOL. The great foolishness of these tradional wave analysts like Prechter and McHugh and others is that they spend years and years trying to call tops that never come and in the interim MISS THEN ENTIRE TREND. That is why Neely has pretty much abandoned wave analysis as a primary trading tool because it does not work most of the time.

srb

EN: The problem isn't the count; The problem is with the individual who creates it and then attempts to defend it even if it's glarringly wrong.

It is likely that we will NOT get above DJIA 12,848 on this run.

rdneu56

So, in other words Crash Prechter is now presenting evidence that forcefully refutes the deflation nonsense he has been writing about for the better part of the past 2 decades – “…the Dow and other markets are way down when measured in real terms, such as against gold or a basket of commodities.”
His evidence is convincing indeed. It shows what a crackpot he really is.

Bob

Yelnick you should put carlfutia.blogspot.com in your list of links. Read through the last 3 years of his posts, the guy just keeps making incredible and accurate market calls.

Check it out.

cstradingman

Bonds should be forming a low and are getting to rally again this week. Let's see where yields close on Friday. If we sell off from here it may be time to stand aside for a bit. Expecting a rally though. Tightening my stop from 4.67% on 10 year to 4.61%. Not expecting the 10 year yield to hit 4.61% If I get stopped out I will look to go long on the selloff at lower prices. We can evaluate the stock market after the bond market move.

cstradingman

Still long bonds. Tommorow will be the test. I predict bonds will rally on the housing numbers regardless of how they come out. Seems stocks should rally along with bonds on the lower rates. If they don't we can consider getting ready to make short equity sales. We will only consider shorting stocks if they sell off on a bond rally! If bonds don't rally sell bonds and wait for a lower prices to get long bonds.

cstradingman

Rally in bonds on bearhish news like I said. Bonds not getting the bullish moved I hoped for but it is coming. Rates dropping again soon. Widening stop so if ten year hits 4.67%, I will sell my long positions. Stocks should recover nicely today. No big selloff for stocks coming yet.

cstradingman

After the Bank of Japan's comments today, I think it is safe to agree with my prediction that world wide central bank tightening is over.

cstradingman

Made some money day trading on the long side today. I'm not a day trader but when the market is this predictable you can't pass up the oppertunity. Stock market should show strength into the close. Bearish news for bonds and they close virtually unchanged. Stocks loving bonds showing inflation is not an issue. Expect stock to rise tommorrow quit a bit.

cstradingman

Also I am quitting my part time job to start as a full time speculator. My real job is now just a waste of my time. I may set up a web site showing my specific trades and stops in real time. It will also show my forcasts more accurately.

cstradingman

HA! :) All equity indices have full recovered!! Seems when bonds don't go my way, I make a killing in stocks. Hopfully we will get more bull crap inflation numbers that bring the market down so we can day trade while bonds stay in their trading range. When the bond bull market gains teeth, this strategy will get increasingly risky. Today was a rare but super profitable day. Still expecting a rate cut from the Fed in January. Go ahead call me crazy! A rate cut in Jan is coming!!! Stay long bonds.

stu mann

Doug Noland at Prudent Bear has been discussing the split between the financial & real economies the past few years. This discussion is more important than guessing at next month's count. This divergence is the same thing Prechter has been trying to express, although now he's further clouding the issue by introducing terms like "silent crash".

Visit any small town - and look past the shining MacDonalds & Walmarts, past the MacMansion subdivisions & European car dealerships. Look at the rancid schools, the overweight adults filling their Costco shopping carts - but you won't see the even fatter children; they're all inside playing XBox, but that's a glimpse of the thing Noland talks about. Financial & real are trending apart.

I guess every generation gets caught fighting the last war, and our generation won't be any diferrent. Right now we're modeling 'crash' in the wrong terms so that it can't be seen. Wave counts are worthless as forecasting tools because the divergence between financial & real has grown too wide. Counting financial waves will not predict a real event.

I'd almost go so far as to say America's economy is now centralized, similar to SOviet Union of the 50's & 60s. Just like the Soviets, all signals will remian bullish while the supermarket shelves grow empty. But you have to be careful how you define "empty". We might now have six brands of milk to choose from instead of three, but if all six are from one centralized supplier, and the milk they produce is tainted by jet fuel, in real terms, you the consumer have no choice.

And just like the Soviet Union, the financial world will be there one day and gone the next.

EW's biggest problem is they're trying 2 express a crash of the real economy in financial terms.

EN

This US stock market is overdue for a correction. I expect an early February botton around 11750 DOW which is the old all-time high - 6 week correction to start any day. It would be classic for the market to fade back and retest that "break-out" point. You can short that downswing and buy the old high for another stellar rally into the spring. Good luck to all fellow speculators.

Ed Stevens

...unfortunately, my bank account and trading account is in nominal terms, therefore, as a result of trading EWI in real terms,I have nominally lost my a.. in real time.
I really dont have time for this.

Harry Fung

My models are showing a bifurcation in the markets where small caps with underperform large caps...

No-- forget that. My models are crap. They haven't been more reliable than darts at a chart. It sucks. You work on models really hard, you think you're making progress, exploiting something others don't see and then BOOM you realize you're a patheic novice staring out at the most complicated system in the world and the only tools the work are stupid "buy and hold" strategies.

Here's my advice. Buy Pfizer and Merck and sell the calls. You could probably make 10 percent a year or so if you sell covered calls on good companies who you wouldn't mind holding a long time anyway.

I'm gonna try that. I'll talk to you later. Best,
Harry

rdneu56

stu mann,

I like your "small town observations" and I agree with your conclusion. Actually, the era of central planning in the United States began in 1913 when Congress passed the Federal Reserve Act. The act established a cartel of central planners consisting of private bankers with the power to create money out of thin air and charge interest. The legal authority of the government backs this system – hence my use of the term cartel.
in my opinion the conditions you are observing are a direct result of this centrally controlled economic system, where a small elite rules over the people through control of the money supply.

cstradingman

Stock market strength today as expected. I just sold QQQQ position. Not that I am bearish, I just don't typically short term trade and I don't know when the end of this move will be. I want to keep my massive profit. For now just sitting bonds waiting for the rally that is coming.

H Grossen

Anyone read about new Portfolio Trading System based on Lakhovsky's Multi-Wave Oscillator? (Georges Lakhovsky was the original discoverer of DNA.)

Money Magazine had a recent article on a Connecticut Hedge Fund which has been implementing the "Lakhovsky Wave Secret" but cannot find any web links to the story.


cstradingman

I just read Tony Caldaro's blog. Apparently, He now too realizes the Fed will be cutting rates soon. He was in the pause to raise camp for a while. He has now made a complete U-Turn as I predicited. He thinks they will cut in March. I think they will cut rates in January. Soon bonds will start to rally again. That combined with continued weak housing data will get the Fed to cut rates in January. Everyone is starting to very slowly get on my train realizing I am right. When everyone is on my train hopefully I am the first one to jump off :)
Good luck! Stay long bonds!

rdneu56

Hubris often goes before the fall...

cstradingman

Here we go bond rally just starting. Wow it took a while for the bond buyers to come out of the woods after the Philly number. Looks like stocks are beginning a downtrend. Stocks will selloff quite a bit first before the bond rally gains teeth. Stocks are upset about the weak bond rally in the face of bad news. It is making bad news acutally bad news. When bonds make a big move up it will be quick, hugh drop in rates. But that could be up to 10 days away.

Shawn

CS, so when do you think stock will start its down move? A major top is yet to form, or has just formed yesterday?

Shawn

Philly Manufacturing index is -4.3 instead of the expected positive 5.

Time for stock to take bad news as bad news? The Northern Trust report on December 12 summed it up very nicely -- in the past recession, it is caused by the cyclical nature in manufacturing industries, while the service industry mostly held steady above the critical 50 (expanding). And on contrary to many beliefs, manufacturing is actually 45% of economy, not just 10%.

Read the million dollar report --

http://www.northerntrust.com/pws/jsp/display2.jsp?XML=pages/nt/0601/1138283681241_6.xml&TYPE=interior

click on the december 12 link.

cstradingman

Hi Shawn. Stock market 'could' be topping. Today's action was a 'small' victory for the bears. The market will spin a rally in bonds as a good thing which is why todays selling was controlled. We really need to see the ten year close below at least 4.50% probably below 4.40% (Last close below 4.50 did not quite spook the market). With yields in the 4.40% - 4.70% range in the ten year, the market will have a hard time selling off as they hope for rate cuts and a soft landing. Todays action was a small victory for the bears because we sold off with yields dropping in the sweet spot. But again, the selling was controlled. I am looking for the big selloff to come in January.

My predicited order of events
1.) Continued weak data (especially housing)
2.) Big rally in bonds (10 year yield closes below 4.40%)
3.) Fed continues to try tough pause talk. Hinting they won't lower rates.
4.) 1st sharp equity selloff as market is angry at Fed tough act.
5.) Fed then backpedels after seeing selloff and says rate cuts looking very probable.
6.) This gets everyone thinking the market will rebound. But no! It's to late!
another quick equity selloff unexpectedly catches everyone by surprise.
7.) Fed then quickly acts and starts rate cuts trying to calm the stock market.
8). The cyclical trend at this point is down. We will get continued rate cuts from the Fed as the market downtrends. (Just like 2000 to 2002)


Of course we will have sharp rallys during the bear as the Fed does surprise cuts. But they will all be sharply sold off.

So I don't think we are there yet. But if I feel I am wrong. I will post it here like always. Good luck!

Shawn

Cs, Thanks for sharing. Appreciate it!

Marty

EN predicted a Christmas massacre

Dow down 150 points in 1.5 days so far

rdneu56

Have bond yields hit a bottom and are they on their way up now? Reversalists would answer yes and trend followers would answer no. Only the future knows the correct answer.

Shawn

What's up with the bond today? Big time drop without any significant story.

Central banks selling? Iran still yet to complete its reserve out of US treasury? ...

Marty

Treasuries are volatile due to some large Geocosmics that hit this week.

Link to Ray Merriman
http://www.stariq.com/MarketWeek.HTM

cstradingman

I think the selloff in bonds today is short lived. It may just be whipping out the bulls. My stop is a 4.67% in ten year yield. If we don't recover tuesday, I will sell my bond positions and take a closer look.

Anonymous

Bull market is in 50th month of 4 year cycle.

Only 3 times since 1893 have stocks have gone past month 49, this is the 4th. Bull definitely is in very late stage.

cstradingman

Had to exit my long bond postition on todays weakness. Will re-enter long if the 10 year yield falls below 4.60%

I guess bonds will sell off more from here? Will also get long again if this pullback continues.

: )

Best xmas present you can get Prechter or one of his subscribers is a new shirt.

They seem to lose theirs every year.

EN

Ha, ha, ha. I did predict an x-mas massacre but it was as a joke and it sure did not last long. I guess this helps to illustrate that grand predictions have almost no value in making money. To make money, you need a good OBJECTIVE method (hint: not EW) and discipline to follow that method. You will consistently lose money by following other's opinions or emotions such as "it can't go any higher . . . it has already gone zzxxaa high, can it?". It is okay to lose a pile of money if you learn a lesson from it but there is no excuse for sticking to something that continues to fail year after year and never learn a lesson from it. I lost a good 80K from following EWI blindly before I finally woke up from the phantasy. I am sure kids that can see a trend line were laughing at me all the way to the bank, LOL.

Occam's Razor boyz!

Anonymous

Free PDF file of NEoWave Discoveries.....

http://www.tradingthecharts.com/
phpBB/Files/NEoDiscoveries.pdf

Bob Prechter

Neely speaks!! Wtf is he saying though? Silent crash, holy crash? Or more good times to come?
Anyone care to share?

Is this guy any good? Worth subscribing too?

-Bob Prechter

It has been a long time since I last warned you of an important, looming market event. In May of this year, I warned of a substantial decline right before it began.

On July 19 of this year, I sent out another public notice which said...

"After accurately warning you months ago about a significant market decline on the horizon, conditions are changing dramatically. Following a massive increase in world tension, wave structure (surprisingly) is now implying a MAJOR MARKET ADVANCE could be in the works."

That was the last time the S&P looked back, embarking on one of its most powerful advances in years!

Now, right at a time when everyone thinks they know what is going to happen next, a BIG surprise is in the works. To prepare, I highly recommend you subscribe to the NEoWave S&P TRADING or CHART service so you know about the BIG CHANGES to come.

To subscribe, click or copy the link below and select the S&P service that fits your needs.
http://www.neowave.com/product.asp

HAPPY NEW YEAR!

Sincerely,
Glenn Neely
NEoWave, Inc.

shawn

Where is Dow Predator?

Cycle

Hello,i am wait for the formation of a shoulder-head-shoulder in january,followed from mini crash in february to 10.700 to 1-2 march maybe 20 i do not assurance,this can are althougt an top,20 march.From 17 july to 1-2 march,or 20 march, is probably are head big,can are have an shoulder right in march to april with projection 9.000-9.300 to summer,july is always very volatile.
The 6 december a aspect astrology hard for the stockmarket,retrograd saturn,i am believe that little can stockmarket up in consequence.TRhe divergence of macd is very dangerous.

Regards.

Notes from Ray Merriman

Long-Term Thoughts

We are living in a Renaissance time, and most of us do not even know it, or cannot find the time to step back and appreciate it. Every 500 years Neptune and Pluto return to their same spatial relationship with one another. Every 171 years, Uranus and Neptune do the same. And every 126 years, Uranus and Pluto do the same. Three Uranus-Neptune cycles approximately equals one Neptune-Pluto cycle. And four Uranus-Pluto cycles equal approximately one Neptune-Pluto cycle. That means every 500 years or so, these 3 outermost planets in our solar system (well, they were until scientists relabeled Pluto this past year) are in approximately the same position in reference to the zodiac and one another.

In 1398-1399, Neptune and Pluto formed their conjunction at 2-4 degrees of Gemini, which was just about the time that Italian Renaissance began. These two planets did not come together again until 1891-1892 at 7-9 degrees of Gemini, which could be argued as the approximate period of the start of another renaissance that we are still living today.

But what is most interesting is that Neptune and Pluto moved into a long sextile (60 degree) aspect to one another from 1460 through 1540. This same relationship returned again 1950-2032. Due to Pluto's elliptical orbit, Neptune actually comes inside of Pluto's orbit and is closer to the Sun during some of this period. That is why this aspect remains in effect so long. In the late 15 th century, as this sextile was in effect, the intellectual and artistic climate of Europe was extremely exciting. It was a time of innovative movements that completely transformed several aspects of life, from economics to art to religion and philosophy. The height of this was even more defined as Uranus and Neptune came into conjunction in 1478-79, and then into mutual reception with one another in the first decade of the 16 th century (through 1509). The same thing is happening now, as Uranus and Neptune conjunct in 1993, and they entered into mutual reception (where each planet is in the other's ruling sign) from 2003 through 2011—while Neptune and Pluto remain in sextile.

We are in another Renaissance right now. In fact, I believe in time historians may look back upon the first decade of this 21 st century and see that it too shared many characteristics of Renaissance Europe (and especially Italy ). The difference is that back then we didn't know that Uranus, Neptune, and Pluto existed, which may be symbolic of the fact that we didn't know how to handle this type of eclectic and electric excitement. Now we know of their existence, and with Neptune and Pluto in harmonious sextile, astrologers know that this is a signature of opportunity—opportunity to solve any crisis if we put our minds to it. After all, Neptune is the imaginative mind, and the quest for peace and beauty. And Pluto is to urge to reform—to get rid of that which is holding us back, and bring forth new models that are more relevant to the current and futures needs of humanity.

That's why there is hope at the end of 2006. In the late 15 th century, they didn't know how to handle this dynamic. They weren't even aware it existed, except perhaps on an intuitive plane. The heights that art, philosophy, and economics reached during that 100 year period, from 1390 through 1490, were incredible. But it all came toppling down in the end through excesses and indulgences by the leaders of that period. That was the first time in thousands of years that Neptune and Pluto were sextile, while Uranus and Neptune were in mutual reception, for these orbital cycles are only approximately proportionate to one another. It will only happen twice.

And this is second and last time. Let's get it right this time, and enjoy the greatness of what we have achieved as a human family occupying this beautiful planet, we call Earth.

Ray Merriman Forecast
http://www.stariq.com/MarketWeek.HTM

Confuseius

Silent crash? In which case - WHO CARES! It's academic hokum that you can't trade.

Meanwhile, keep watching the real prices of things you can actually trade.

Lao Tzu

Prechter doesnt even trade stocks or futures.

He trades fear for cash.

Main Entry: fear·mon·ger
Pronunciation: 'fir-"m&[ng]-g&r, -"mä[ng]-
Function: noun
: see SCAREMONGER
- fear·mon·ger·ing /-g(&-)ri[ng]/ noun


Main Entry: scare·mon·ger
Pronunciation: -"m&[ng]-g&r, -"mä[ng]-
Function: noun
: one inclined to raise or excite alarms especially needlessly
- scare·mon·ger·ing /-g(&-)ri[ng]/ noun

cstradingman

Bond correction not over. Ten year should bottom at 4.74% 4.78% yield. Stocks are and should continue to perform well during this bond correction. 2007 is the last chance for the cyclical bull market in stocks to roll over. If stocks don't roll over into a bear we are in a secular stock bull for many years to come. My view is stocks will top this year a roll into a bear. The bond market will signal us a top. If the 10 year yields breaks 4.82% and heads higher (not likely) stocks will top. OR if the ten year yield falls below 4.38% (my view) the bear will begin. I also more and more believe that this current rally will be the rally that forms the top in equites and it will rally much farther then most expect. Even the bulls have been warning of a correction for well over a month now!! When the first so called 'correction' finally occurs it will not be a correction at all. Good luck and I hope everyone had a happy new year!

Kk

Neely is still bullish

http://www.traders-talk.com/
mb2/index.php?act=Attach&type=post&id=5132

cstradingman

The Fed just trapped themselves in having to cut interest rates in the minutes. Fed setting up market for rate cuts.

cstradingman

Looks like cstradingman will be dead on again calling for Jan rate cuts in fed panic and even correct for the primary reason I forcasted 'housing'.

Kk

carlfutia.blogspot.com is still bullish along with Neely

cstradingman

Still waiting for 10-year bond to break out of the 4.38% - 4.82% yield range. Stocks will remain biased to the upside until then. I am predicting the ten year yield to break below 4.38% of course. Volitility in the stock market is picking up big time. Good sign that we are getting closer to a top. Did not expect bonds to rally this much. I still thought we were in a correction but not I am not so sure. I may start laddering some bear spreads in the stock market soon if the bond market continues to rally from here and yields keep dropping.

cstradingman

Oil dropping, Gold not shooting up, Copper drooping, silver, etc. all looking tired. Interest rates STILL low! How there can be so many inflationists around still baffles me. It's always amazes me how stupid people are. Deflation WILL be the next major event, whenever it decides to show it face.

cstradingman

The more I look the more I realize this is looking really good for the stock bears. Even the bulls are cautious as the market goes up and up and up. The bears are almost all bulls. I am going to tell my targets for a top in equities. The Nasdaq 100 will make a new high my a little bit. The nasdaq is starting to make a new high soon. The Dow will get to at least 12,675 and not reach 13,000. I think it will reach around 12780. This is it!!!! The final blowoff to this cyclical bull market!!! Alot of bears have been waiting for this. Unfortunately, 99% of the bears have now thrown in the towel. We now have fearfull FED ready to cut rates. And a reckless stock market. Also cautious bulls who keep calling for a correction! PERFECT recipe for a top! You can be a trader all your life and see an oppertuniy like this maybe once. I ahve been praying for this scenario and just can't believe my eyes it is here!!!! Good luck!!

shawn

Too bad yelnick's blog does not allow image posting, else there is a pretty convincing chart of end of bull run. If rising wedge triangle is a good indicator, then CSTradingman's target will not be realized.

You can look at the Bear-ry beautiful chart at http://xtrends.blogspot.com. Scroll down to date Jan 03, 2007.

If there was ever a convincing chart for bear case in recent months, this is it!

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