In summation, calling for a double bottom at $14 then up…
what’s the consensus here?
Everything is trading Off the Yen!
yen goes up stocks go down..its the yen carry trade
Still in Phase III Zone…
Gold reversed up in the Full Moon Timing Window – gold rallied despite the weakness in crude oil – bullish divergence.
The rally in gold looks impulsive – some kind of 3rd wave higher but the GDX is lagging.
Looking for a short-term top in gold by Wednesday which is a 34-day Fibonacci step out from 11/7 – how we correct will tell us a lot about the longevity of this rally – our bias is for a bullish consolidation. Trader Jack
2 HOUR CHART (encompassing THE WHOLE CONSOLIDATON FROM HELL ZONE )
IF Gold is going to rise against Gravity in the Commodity and Currency World
There is going to have to be some serious SH!T going down here…Lehman 2 ?
Maybe JP Morgan or Goldman Sachs or some Too Big to fail Bank were long Oil and got neutered ?
From Rambus Chartology
SAR sell signal generated on the daily chart, ADX negative. If MACD crosses over to the downside, the plunge could start in earnest. Watching from afar this volatile PM market.
Original blog post published on 12/3/2014; click here to read it in detail.
In this analysis, we take a look at NTES and YHOO, comparing their recent price run ups and what may lie ahead while keeping in mind the following quote:
“When torrential water tosses boulders, it is because of its momentum; when the strike of a hawk breaks the body of its prey, it is because of timing. Thus, the momentum of one skilled in war is overwhelming, and his attack precisely timed.” – Sun Tzu, The Art of War
Note that YHOO closed below its 21 DMA on 12/4; in our analysis, this price level was identified as a key one that the bulls have failed to defend for the second day in a row. This is a first occurrence since mid-October.
For those not aware, Martin Armstrong’s computer models are the most sophisticated Artificial Intelligence models based on thousands of years of historical monetary perspective that exists today. His name is, appropriately, Socrates:
As a generous service to the public, MA posts daily thoughts on his blog at www.armstrongeconomics.com.
Armstrong developed Capital Flow Analysis, which is the basis for his ECM (Economic Confidence Model). The ECM is a global composite model that tracks the movement of international capitals flows from sector to sector, to country, all in cyclical manner. He has proven that there is order in chaos. He is quietly followed by institutions, higher levels of all governments and more of an influence that anyone can imagine.
Although it can be a challenge to connect the dots in his writings, I feel it is important to do so as much as possible for everyone’s financial health. So I will offer a brief summary on his current views on the stock markets and gold. For politics, you will have to read his sight.
Macro View –
Armstrong’s macro views suggest we are in the final stages of a global Sovereign Debt Crisis that will likely reach its tipping point with the peak in the ECM: October 2015. The global debt levels currently stand around $159 Trillion, with the US a fraction of that, around $18 Trillion.
Globally we are in an epic bond bubble seeking a pin. To put this in perspective, the total size of the world stock market capitalization is $54.6 Trillion (2013 stats/higher now), or 25% of total market capitalization. Bonds are a much larger market, 3 x larger. As economies and governments continue to decline outside the US (Europe, Japan), capital will continue to seek refuge in the US dollar, US markets, tangible assets, art, real estate, etc. This is all happening now and has been for a number of years. Institutions hide out in the DOW, which is always his reference point.
Yet, the bond bubble is not the only thing we are dealing with. His model on the Cycle of War turned up November this year, with a culmination expected in 2020. It is important to note this is the first time in 300 years, since the 1700s, that the international and domestic war cycles have converged. Armstrong views this combination as lethal and the most destructive force to the global economy. Global civil unrest, massive unemployment in Europe, the hunt for taxes, collapse in capital flows, the rising dollar/collapse in the euro are all part of this trend.
I’m not sure anyone can tell you “how” this will unfold over the next year and the years to come, but surely it will be volatile and crazy. Here is a review of the two most prominent scenarios in MA writings to date:
Scenario #1 – PHASE TRANSITION
The US markets (lead by the DOW) enter a Phase Transition, which is basically a stock market melt up INTO the ECM peak 2015. The Phase Transition in 1929 and 1987 lasted 54 & 59 weeks respectively. As today is Dec. 3, we are running out of time to have such an event line up the ECM peak. Do not rule this out yet, as he has not.
Without a Phase Transition in the markets, where investment in stocks EXCEEDS debt (as in 1929), there will be no dramatic crash. It is well publicized that the “retail” investor is not in these markets, as evidence by the liquidity levels at 50% of 2007 levels. The Phase Transition is what pulls in the retail investor, likely too late. Even pension funds are rebalancing their bonds and adding SM exposure. Central banks are even buying stocks, as crazy as that sounds.
With each cycle, different sectors take their turn at rising/collapsing. With the ECM wave peak in 1998.55 we saw the collapse of emerging markets (Russia) then Dot. com in 2000. In 2007.15 wave peak, it was real estate and bank derivatives. 2015 will be the Bond Bubble. Keep in mind this is all extremely deflationary. Even oil, the last man standing until recently, has seen its best days.
I believe this is the scenario Armstrong favors, however it is not crystal yet that this is what will happen within the time frame.
Scenario #2 – CYCLE INVERSION
The DOW could make marginal highs into January 2015 and decline with a LOW into the ECM. (Holding 14,470 – 15,560 on DOW in 3rd Q 2015 and 14,700 on the quarterly would be bullish going forward.) The shift from public (government bonds) to private assets would then extend the stock market bull into the downside of the ECM, 2017-2018. This would also extend the traditional business cycle that should peak in 2016.
He has also suggested a consolidation into January, then a high into March with a low into the ECM.
January 2015 – What to Look For
January 2015 is a seasonal turning point. Note: A turning point is just that…it could be up or down. The KEY resistance to watch for is 18,133-18,200 level on the DOW. This is the top of the Primary Breakout Channel from the ECM turn back in 2011. Should we break above this area and close there on a weekly basis, then this warns we may see the DOW at 23,000-26,000 by the ECM peak in 2015. Exceeding this area will point to DOW 40,000 – 43,000. “What will not go down when the cycle shifts, inverts and rises even further.”
A dollar break out above 2010 highs is significant as well. A rising dollar will attract foreign capital into the US markets as it did for Japan when the yen was rising going into 1989. The rising dollar then put pressure on all those who issued dollar debt to save interest outside the US and contributed to bond defaults globally.
If we start to see a melt up in stocks, everyone will be confused. Heck, it is confusing! Currently, the markets are extremely overbought and sell signals are flashing red all over the place. But under a SDC scenario, fundamentals (with respect to indices, not individual stocks) won’t matter. You must pick the right sectors/indexes/or you will get killed, as all sectors will not rise equally. Sir Rambus can help with that and already has.
Keep in mind these projections are not “opinion”. They are computer generated forecasts worthy of your attention.
A total breakdown in confidence as government and currencies collapse (likely Europe first) is a REQUIREMENT for capital to flee into ALL tangible assets (corporate debt, shares, gold, commodities, real estate.)
But first, watch Europe closely, as the breakup of the Euro and the demise of gold go hand in hand. The Swiss Ref rejection paints a very negative picture. What do you think will happen when governments decide it’s time to sell their gold as 1) they are broke and 2) as the world adopts electronic money?
All I can tell you is we are still dealing with the deflationary fall out that is burning down so many economies globally. “This is a question of TIME more than price. If we see the Bond Bubble implode in 2015.75, that is when you will see the greatest potential for a rise in equities and the turn in all tangibles, including gold.” But note, the Chaos Model points to 2016.
Currently gold is in a seasonal upswing. MA has a turning point on Dec 8 with high volatility on Friday Dec 5. Until year end, the major trading range is 1042 – 1310. We need a closing above 1220 to indicate a rally is possible to 1255-1275 major resistance area.
On the Yearly, a failure to close above 1228 will be very bearish for next year.
Target for gold still fall 2015. Whether this is “the bottom” or some sort of breakout remains to be seen.
Armstrong will update his Metals Report in January 2015. FYI.
What Happens After ? –
Armstrong has refrained from any real detail in this area. If you are scared, you should be. There are times this brings me to tears.
He says the next decline is going to be far worse than the last one.
There is so much to read and comprehend. Please read his site daily, take notes and maybe together maybe we can navigate this disaster a bit better. One closing thought that is my “opinion”…As history does often rhyme, I wonder how the US markets will react when we start to see Sovereign Debt defaults. I’m thinking huge market swings and totally confusion.
BTW, MA has a movie out in Europe that seems to be stirring the pot…good for him:
Hope some of this helps.
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See original post of analysis published on 11/27 here
AAPL bears swarmed in and pulled the stock back to its 5 week moving average, where it is currently resting at. The signal to short was on the double top just under $120 amidst a sustained spike in -DMI.
“The new warning signs we detected yesterday came from the behavior in the Volatility Index, or VIX. The VIX is a measure of volatility expectations derived from trading in S&P 500 options. Typically, the VIX falls as the market rises. Yesterday, however, the VIX jumped more than 5% even though the S&P 500 hit a new high. How odd is that? Since 1998, it has only happened 10 other times.”
ANSWER: Yes this is the pop. We got the Panic Down on Friday, the Monday low, we need a closing above 1208 to suggest pressing higher. Welcome to the new age of rising volatility. This now cleans out the shorts. Resistance stands at 1217. A close above that should signal some further upside.
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