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Created on: 5/11/2011 3:28:16 AM Last Update: 5/11/2011 3:39:53 AM Posted by: RTT WARNING: This entry is 5598 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.
1 POST
Cycles say the bears are about to roar
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The Stock market pushes higher and higher, what fool would take a short position against this mighty liquidity pump up, however there are a few dark clouds in the next few months: US Summer is seasonly poor, QE2 ending, earnings are peaking, Greek woes. When the SP500 sinks, historically the US dollar rallies, transports fall and funds rotate out of aggressive stocks to defensive stocks. Let's review these cycles to see what we can expected next.
Dow Transports: If Transports fall, this can lead to a Dow Theory Sell signal. Defensive Stocks: If folks are bearish, they begin to rotate monies into defensive stocks. US Dollar: If the risk off trade is the theme, then the commodity currencies and the Euro will fall, the offset will be a rally in the US Dollar. A rising US dollar will wipe millions off the sales revenue of SP500 companies, thus earnings will be lower.
Between 2009/10, many cycles suffered an inversion to price, this was due to very bearish sentiment reversing on massive quantitative easing (QE1) from central banks around the world.
The cycles show all are due for a rollover, it is going to be very interesting in the next three months. No wonder sector rotation into defensive stocks is the current theme in the SP500.
QUESTION: Are the bears about to roar ?
If you concur, SPY puts and bearish ETFs should be on your menu near the end of May 2011.
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Changes in the world is the source of all market moves, to catch and ride the change we believe a combination
of Gann Angles,
Cycles,
Wyckoff and
Ney logic
is the best way to ride the change, after all these methods have been used successfully for 70+ years.
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Investing Quote...
.."After exhaustive researches and investigations of the known sciences, I discovered that the Law of Vibration enabled me to accurately determine the exact points to which stocks or commodities should rise and fall within a given time. The working out of this law determines the cause and predicts the effect long before the Street is aware either."..
William D Gann
.."To cause high prices, all the Fed will do will be to lower the re discount rate..., producing an expansion of credit and a rising stock market; then when, business men are adjusted to these conditions, it can check, prosperity in mid career by arbitrarily raising the rate of interest. It can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate, or cause violent fluctuations by a greater rate variation and in either case it will possess inside information as to financial conditions and advance knowledge of the coming change, either up or down. This is the most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. The are private, conducted for the purpose of obtaining the greatest possible profits from the use of other people's money. They know in advance when to create panics to their advantage, and when to stop panic."...
Charles August Lindbergh Snr
Unless you can watch your stock holding decline by 50 per cent without becoming panic stricken, you should not be in the stock market.
Warren Buffett
..."If you don't read the newspaper, you're uninformed. If you read the newspaper, you're mis-informed."...
Mark Twain
..."This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President Woodrow Wilson signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill."...
Charles August Lindbergh Snr
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