Yves Issues a MAJOR buy signal!

Under the bright full moon, the contrast of pundit opinions gets sharper.  Today's STU is convinced we are in a third wave down of several degrees - their long awaited 3 of 3 of 3.  Neely is half short, and frets over volatility this week before going all in - his wave (D) correcting since Jul15 may not quite be finished, so he is still on the fence. Yves in stark contrast has a big buy signal from his Liquidity Index, due to the huge drop in oil this morning.  More below the fold. 

A crisis of liquidity not of stocks!
Blaming Reaganomics ………

We issue today the 15^th September a Buy signal.We had hoped for a retest of 11,000 and predicted such an event on Taking Stock, Bloomberg TV on the 25^th of July.

The thesis was for another financial accident to hit and generate enough gloom to finally move on to better days ahead.

I believe we are in one of the greatest shift mankind will experience in its history.  Clean technology and climate change issues are going to create enormous wealth.

From Roosevelt's New Deal came a period of stability for the financial system.  It was undone by Ronald Reagan promoting less government interference and has created what you see today.  Perhaps taking from past episode one should question the validity of bailing out unruly players at the detriment of the economy and the greenback. 

Rates in fact should go higher to raise the dollar, lower oil and maintain the integrity of the system.  Cutting taxes on savings will promote a larger capital base and lower mortgage rates.  Raising taxes on consumption should offset that cut.

Investors looking to the past have good reasons to believe that good things are ahead!

Yves Lamoureux, Blackmont Capital Inc.

Disclaimer: opinions and projections contained are of the guestblog author and may not represent the views of Yelnick, Blackmont Capital (BCI) or any other organization. The information contained herein is for information purposes only and this report is not to be construed as an offer to buy or sell any securities. Neither Yelnick, BCI nor the author accepts any liability whatsoever for any loss arising from use of this report or its content. The comments and opinions expressed in this letter are the result of work done by Yves Lamoureux. They may differ from the opinion of Blackmont Capital Inc. ("BCI") and should not be considered as representative of BCI, belief, opinion, or recommendations. The statements and statistics contained herein have been prepared by sources we believe to be reliable but we cannot represent that they are complete and accurate. This material is published for general information only. BCI assumes no liability for financial decisions based on this information. Readers should obtain professional advice before applying any ideas mentioned to their own personal situation to ensure their individual circumstances have been properly considered.  BCI is an independently owned subsidiary of CI Financial Income Fund. CI Financial is a Canadian owned diversified wealth management firm

 

Comments

[Hank Wernicki]

That's a brave call !

I'm seeing a horrible week to continue !

Hank

[Wavetrader]

Ives see's a Green Moon of Diamond's along with a Man on a white Horse

You really are funny Yel

[Upstart]

New lows to around Tom CZ's DOW target will complete a leading diagonal, perhaps.

[dlu2]

who will lose the hat? yves, neely or bob prechter?
whose hat will fly ? lets see. it is getting interesting.

[george]

yves,
what is the fallout at blackmont capital(bci) in
regards to the broker/banking problems?
does blackmont have any exposure?
george

[yves]

George , we act as managers and get a fee for that. That is all we do.None of that funny business.It could all be very simple for other outfits as well.Thats what happens when you get too greedy with profits.I used to work for Merrill Lynch.A lot of folks I know are loosing a lot on the shares.You get into this game and thats the risk.

Yves

[I. Sosceles]

Bottoms:

NAZ 2140
DOW 10,600

[elskid]

Was it Regan to blame or Nixon for cutting ties between gold and the dollar?

[yelnick]

ehkid - Nixon, Nov 1971. Previously FDR, Mar 1933 - confiscated gold from citizens, removed it as a currency in circulation (gold coins) but retained it as a reserve currency. FDR also somewhat randomly set it at $35/oz from $20/oz, where it had been in the Dollar or prior equivalent currencies for 250 years back to the United Provinces of Holland. Today's Dollar is worth about 4c of the 1933 Dollar.

[Stan]

Good bottom is in. Next top before we take out this bottom: Dow 28,000. Sometime in early 2010.

[Serg]

Fork theory(which I'm writing right now) says minimum target (median line) has been reached. Indicators show positive divergences, Elliott Oscilator not yet crossed but it is slow indicator. It did gave us fake attempt to cross 2 days ago though.

So expecting a low around here somewhere (if it was not today) when bounce to the upper blue fork band and down again
http://forkoholic.com/images/spxminreached.jpg

"May The Fork Be With You" (C) Serg ;-))

[Serg]

Looks like Yves's Liquidity Index gives signal every 10 days or so.

[george]

serg,
your ptchfork chart/oscillator lines haven't
crossed yet.
what i think is more important is the huge positive
divergence that has formed at this low on your oscillator comparing
it too the index price during the low points in july and september.
look at the price low of the index in july and in september.
now compare that to how the oscillator was lower in july
than in september at those same price points.
george

[george]

serg,
i am not saying to go long the markets
based only on oscillator divergence
to price.
sometimes divergences can last a long
time as the market continues up or down
and you lose money.
george

[Fork_Master_Serg]

About Dow 28,000
here's an interesting cyclical projection til 2035

Note: during bull market projection is too rosy, during bear - too grim
http://astrocycle.net/Astrocast.gif

can you say THE GREAT DEPRESSION?

[Fork_Master_Serg]

George,
I think we're repeating the same fractal structure as we had earlier this year

http://forkoholic.com/images/spxgeorge.jpg
so I'm expecting similar pattern - see yellow circle in January
but stretched in time

[Wave Rust]

Yves,
I agree that it's a strong buy now. Timing guy I subscribe to says Wednesday or Thursday should get the safer retest signal to buy spz and ymz.

I'm already long nqz.

wave count is that this is the low of B of 2

I can see the C extending into 2009, but its still a 2

[min]

I see a low of sorts sometime this week. Too early to know if it is the low for the year but we can always hope (unless you are Prechter) right?

There probably is a “land of milk and honey” out there. Somewhere where leaders, politicians and the general population are endowed with sufficient IQ, common sense and an ability to focus on more than only personal needs and avarice. Such people could easily and effectively resolve complex situations in a manner that would actually work for the majority without creating lethal side effects at some future point in time like a typical prescription drug. Unfortunately, I don't think Earth 2008 is it. Hopefully someday it will be.

Deep financial system rot of the magnitude that seems to be unfolding seldom resolves quickly, but we can dream and thereby begin to change for the better for sure.

A key ingredient missing is not too much or too little government policy, but the quality and the aim of those that we put in office to guide our civilization. This in turn comes back to our own personal values and the amount of responsibility we are willing to take for ensuring morons and those with little more than a self-serving usurpious agenda don't leak through to key offices.

We have a say in this today. Will we have that tomorrow?

[min]

P.S. currently short NDX.

[yves]

http://www.blackmont.com/lamoureux/OurServices_Liquidity.html

My liquidity index have had more signals recently than usual but these are exceptional times.
So far happy with the call.Next wave up should be wave one .The following wave 2 correction should be psychologically more dammaging than price dammaging.Good luck making money.

Yves

[min]

Closed short for healthy gain. Now long NDX with tight stop

[Francis Schutte]

A brave call Yves. However, as long as the Garage sale goes on, the markets will come down. Higher stock markets can be seen later on once (when we have hyperinflation) the investors start to buy stocks to get rid of those worthless dollars and other paper money.

[Hal]

Francis, when you think the garage sale will end? And what kind of a washout are you looking for in stocks --how much lower from here?

Also --by what mechanism(s) will the Treasury hyperinflate? Making the currency easier to counterfeit?

[Yves]

I have bot enough since monday to go from 60% cash to about 30% cash today wednesday.All indicators are on strong Buy.Cheers

Yves

[Yves]

Francis , good point and I think we are on the same level.Weimar is a good study.

Yves

[Hank Wernicki]

A GREAT BUYING OPPORTUNITY IS AROUND THE CORNER << SOON

STAY TUNED AND CHECK BACK

HANK

[MHD]

WOW, 3 month t-bill going for .02% as of 2:30. Hard to believe!!!!!!!
I wonder if that's a record low?

[Wavetrader]

it's plain to see yelnik and ives have never seen a bear market!

you have to live one to know one

good luck to all traders

wavetrader

[Paul]

There is a lot of panic among investors and the flight to quality. That move by gold today was stunning! It remains interesting to see what will happen tomorrow, but my guess is that investors will start taking their profits.

[yves]

I have warned since 2007 about this coming debacle.Where's the surprise ?
http://www.blackmont.com/lamoureux/files/commentary_Lamoureux_Resolution.pdf
http://www.blackmont.com/lamoureux/files/commentary_Lamoureux_Financial.pdf
http://www.blackmont.com/lamoureux/files/commentary_Lamoureux_CDO.pdf

I have kept 60% cash since May and recommend buying NOW.A bear market puts back stocks to its rightful owner.

Yves

[Fork_Master_Serg]

Bob Prechter on Yorba today (archive will be later) - up to 80 years of supercycle wave 4 correction since 1999
http://yorba.tv/archive-2008-09-85-3-start.htm

[David]

The Dow tonight is almost back at the top trendline of the channel that describes the 1931-2000 bull market on a log scale. The original throwover of the top channel line occurred in 1996 and was retested in 2001-2002 in forming the platform for the W-B (?) advance to the 2007 high.

There are 2 options now as I see it. Either the channel line acts as strong support and for a correction back to 11500+. Or there is a short hesitation before a huge 3 of 3 as price plunges through the trendline. At times like this the market has a choice .... or does it?

[Paul]

I remembered in Conquer the Crash, Prechter mentioned a pageful of reasons and explanations about why the fed won't bail out banks. We now know that he's wrong. And going back to the question of gold. I've long bought into Prechter's theory that gold would go down in a deflationary depression and that cash would remain king. Do you think today's action proved him wrong? That maybe the fed's action will eventually be hyper-inflationary instead of deflationary?

[george]

i am surprised they get robert pretcher on
cnbc, cnn or foxnews today.

george

[george]

i am surprised they didn't get
robert pretcher on cable news tv today.
george

[george]

i guess i will have to
watch robert pretcher on yorbatv
instead of cnbc
george

[Hal]

So the Fed is bailing out banks? Or is the Treasury?

And what happens when they run out of money?

How do you inflate? By what mechanisms?

Will someone kindly fill me in? Yves? Francis? Paul? Yelnick?

[Mike Laird]

I'm looking at the NASDAQ Composite at 2098, which is 27% below the October, 2007 peak, and it seems to be accelerating down in recent days. What ever happened to the Technology Surge?

[yves]

Hal, I just posted an important chart in my previous essay of last week.Freeflation is back .It also contains an important chart of monetary changes in aggregates.Here is the chart again
http://yelnick.typepad.com/.shared/image.html?/photos/uncategorized/2008/09/09/freeflation_chart.png

You will notice that GDP will pick up after such a huge stimulation and should be felt by next year.Both the Fed and the Treasury have lending powers and I include them in my model.The Fed technically could be bankrupt if other big accidents happen.I believe that by having the Greenback a reserve currency makes this situation different.Of course the expected path could be hyperinflation for some assets in a larger deflation trend.The real question is finding what asset the market will choose in inflating.Cheers

Yves

[Upstart]

Gold's action smacks of intense bear market rally. But even if not, moves like that in any market are similar to gaps, and most of it will be retraced in a few days.

[Paul]

Yeah, I myself expect gold to retrace most of the rally. Let's see what it does around $850.

[Fork_Master_Serg]

Russian market was closed for 2nd day - maybe gold jumped on that as well

[Tom CZ]

I am BUYING - as to my previous view - I am buying RUSSIAN MARKET - good proxy of commodities + equities rebound - also the market fell much more than US last days and the russian government looking to provide support (which means to me they would "fight" against another fall). According to imppulses coming from US - I have to repeat myself VIX stands around nice 35 area (of course may get higher - but the market is already quite low in price terms so the RISK is LOW and REWARD great). And other bearish indicators at extremes in opposite to bonds. Today I got call from memeber of my family who is out of the financial business telling whuaaaaa whats going there on euqity market and thats really bad. The same talk I hold with someone else when crude holding at 150 and she saying it will go more because of mismatch between 30y demand and supply. And I loughed - where is the commodity story today two months after... nowhere. This all is about FEAR - IF thats FEAR and NOT HOPE then its BUY.

ps b/w guys isnt it strange they we waited for all that crashes to the first days of september when all guys back out for holiday... - isnt it another dirty play in the air?

Tom CZ

[da bear]

The stock market setup looks pretty ominous. It seems as if The Greatest Depression is here.

here is a link to my latest Report: http://2cents.dailyreckoning.com/viewtopic.php?t=35774

da bear

Fear is good. Fear works.

[min]

Prechter on Yorba.Tv.? Hmmmm... These buy signals are coming way too easy, but gotta go with what works since he is so consistently wrong. Bears better tighten those stops just in case.

[Paul]

Tom CZ, you are going to invest in Russian? Did you know that market declined by over 90% back in 1997-98? Don't ever try to catch a falling knife. Be patient and wait for that major reversal pattern.

[Tom]

Where is President Szvazelinovic? Comrades Bush, Paulson and Bernanke making glorious revolution in the US! Bears crossing the Artic and coming South via Alaska!

[Tom CZ]

Re Paul>

sure I remember russian crisis - the point now is that russian economy is thx to commodities spike in much better shape than 10 years ago so I really doubt they are in the situation when not able to repay their debts etc....

[da bear]

gold is having a huge reversal today. looks like a D wave...

anyone know anything about D waves? sounds like a strange up wave in a pattern to be retraced with a final E wave down.

da bear

[Upstart]

Paul, I read Carl Futia's blog often, and his morning comment was that December gold could make it to 935 but that would be it. He still looks for a drop to 700.