A big-belly politics game of rochambeau (the game paper-rock-scissors, but it has another meaning) is brewing in global markets. The Bank of China said that "the real economic crisis is just starting." The US just imposed stiff tariffs on Chinese imported tires - this just before the G20 meeting. China continues to call for an alternative to the USD as the reserve currency, and continues to encourage accumulation of gold. Data from China suggests they really are on a recovery - permalink here but it may be broken or hacked/see Sept 11 post at that site - but the stimulus-driven recovery is making China more dependent on the US, not less.
This suggests to me a continued meandering uptick in the market into the G20 meeting in two weeks, and lots of maneuvering in the background. A breakdown of G20 concerted action could then cause a rapid movement of hot money out of current investments.
The key to all markets remains the USD. This chart from the Friday STU shows how the Dow and Dollar have been in an inverse dance. Another good chart is here. The wave pattern of the USD says it is in a final move down, a fifth wave out of a triangle. When it ends, there should be a strong reversal of fortunes, with the US Peso coming back strongly. A framework for thinking of this is that the rally has caused a return to risk, including in emerging markets; and a strengthening USD will signal a return to safety. Fear of a trade war would cause sentiment to reverse.
that is what i have been thinking.
DOW 10,000 could be it.
i am not sure if gold can run if stocks turn down.
i think gold is in wave 5 of B of the November lows. i think it can run to $1,100 but that is probably the maximum gain from here.
da bear
Posted by: da bear | Sunday, September 13, 2009 at 07:03 PM
People often anchor their thoughts around whatever numbers/images they hear early on. It's why bazaar vendors always starts with a ridiculously high number.
I think there's a decent chance that Prechter's longstanding prediction for the next major low will be too high. We might well be looking at a double digit Dow or the sort of world where the Dow disappears like the Russian stock market in 1917. I just think we hit a stretch of confidence so anomalous it will be corrected more powerfully than the credit crises of the 30s.
Posted by: Stu | Sunday, September 13, 2009 at 07:39 PM
I prefaced my last comment the way I did because Prechter is often taken as the low "extreme" by newspapers and even websites like this one that you'd expect to be varied and fringe-y.
Posted by: Stu | Sunday, September 13, 2009 at 07:41 PM
Stu,
So will you be shorting all the way to double digits?
Posted by: min | Sunday, September 13, 2009 at 11:29 PM
The area of the previous 4th (29-32) is 400-40 dow points.
Prechter says we are ending the Grand Supercycle so basically that is where he says we are going.
If we end a millennium wave then his charts have the previous 4th as 1-10 points (south sea bubble)
I don't this shorts would get paid.
Posted by: dom | Monday, September 14, 2009 at 05:39 AM
Oh my Gosh, OH MY GOSH
Another loss with Neely - thrid one within one week !!! Neely - a new GURU o selling bottom, buying top !!!!
Posted by: forPPP | Monday, September 14, 2009 at 12:45 PM
""Well, with Mercury retrograde you can throw out the rules, and with Saturn in opposition to Uranus, financial markets (and world leaders) may once again be blindly approaching the precipice of a cliff that they can’t even see right before their eyes, arguing all the time as they begin to step over the edge. If this makes sense to you, then you must be well versed in Financial Astrology, for there is nothing else in the realm of logic that could possibly explain what is now happening… and about to happen in the next two months.
In fact, there are a whole lot of things that should be making politicians, world leaders, and investors very nervous right now, for the symbolic meaning of Saturn and Uranus is “losing control,” as in “a sudden state of crisis.” It can be explosive, and with Pluto also changing directions now, it can also be a very dangerous period. But which market (or government) is going to fall? Equities? Precious metals? Currencies against the Dollar? Crude Oil? The market is saying each could topple, but… that is not logical.""
--Whoa Dude!
Posted by: Mamma Boom Boom | Monday, September 14, 2009 at 02:42 PM
Now I feel more informed.
Posted by: GK | Monday, September 14, 2009 at 04:42 PM
Another loss with Neely - thrid one within one week !!! Neely - a new GURU o selling bottom, buying top !!!!
Man, relax. Neely's winning percentage trades over the past year is about 60%. With that win-loss probability, the odds of any given three trades in a row being losers is 6.4%, so it's bound to have happened at some point.
Posted by: DG | Monday, September 14, 2009 at 06:13 PM
And just trading Neely's monthly forecaster would have one up 50% so far in 2009. I use this for my wife's retirement account that is limited to mutual funds. Up 116% over the past 2.5 years.
Kevin
Posted by: kevin | Monday, September 14, 2009 at 07:41 PM
Hey Ned:
And don't forget, since Pluto is no longer a planet, that's going to change everything around by the square root of 1.618 divided by the cube root of a dice throw
Posted by: min | Monday, September 14, 2009 at 11:48 PM