Today's Market
by Dr Invest
We have been riding a wave of hope over the past 4 trading days. Eventhough caution entered the market over the past two days, the over-riding hope is that the FED will stimulate the economy so the positions so bravely taken by speculators will turn into a significant gain.
I don't expect that the FED will oblige wall street with an August stimulus gift. From a technical point of view, we still have a bit more energy in the market that needs to dissapate. Look at the chart below:
What we are seeing on the righ hand side is my prediction for a decline in the market around August 15th, give or take two weeks. If you look at the "head and shoulders" formation on the left, you can see how the hopes for QE-3 elevated hopes before a decline. I expect that the "head and shoulders" formation on the right will have a similar pattern. As GNP growth slows, the market often rises. Called a "bear rally", there is an expectation that the momentary down turn in GNP growth is over and the market will continue an upward trend just around the corner.
This is what we all want... a little down turn... everyone else to sell... and then we buy.... the market rushes upward and we gain 20%. At the end of the year, the applause rises from the investors as they recognize true genius.
This interview with Munson is shocking. Just listen and you will get the general attitude of many wall street investors. And these are the people investing your money. Let me say it like this: "Just stay out of the market!" See the interview here: http://finance.yahoo.com/blogs/breakout/archive/2.html
Tomorrow, Bernanke may stimulate the market... if so, I would be very surprised. Bernanke doesn't have many bullets left and pushing more liquidity into the market (printing money) will only aggravate the coming inflation.
ABOUT GOLD
Gold is a miserable little imp at this moment. It wants to be all grown-up, but year to date it has been a wimpy midget. This doesn't mean that the little midget might suddenly turn into the HULK, but several things need to happen for gold to burst on to the scene once again.
Inflation and a weaker dollar is the first requirement. Because of Europe's woes, the dollar looks unusually strong. Furthermore, many foreign investors are holding dollars because it is, at this time, the most stable currency.
Gold has declined and presently is in a side-ways pattern, some call it consolidation. Either gold will regain its footing or see a strong move downward. I think that when we see a strengthening of world economies, inflation will inflict its aweful punishment on economies who failed to see the power of its vengence.
Gold will be a good investment, then. (When inflation rises or the dollar loses value.) In the last six months gold has lost 7.33%. Not such a good return for 2012. Remember rule one, "Don't lose money!" I'm not in love with any company, nor any commodity; I'm only in love with winning investments.
EXERCISE CAUTION
This is the time to exercise caution. Many voices in the investment community are warning investors to "Watch-out!". It would be wise to take heed. Stick to the investment plan I gave you in May. (Go back and read the May blog.) We will worry about investing in stocks at the end of October. The market could rise... Bernanke could stimulate and bring a two or three month bull market. The problem is that no one can be sure when the market will suddenly collapse; and when it does, it collapses suddenly and without warning. Within a week, all your gains for 2012 can be erased.
Though I can't be sure, it seems like the left part of a "Head and Shoulders" pattern has formed. The hope for stimulus has driven up the left shoulder and when that collapses, investors could feel a world of hurt. Still, Bernanke could stimulate the economy in September. These kind of efforts only create an artificial market and when stimulus is removed or can no longer be sustained, the pain will be terrible. Be wise and patient, wait for the right opportunities and keep your STOP-SELL in place on all your investments.
(note: the above article is for entertainment purposes only and not to be used as investment advice.)
by Dr Invest
We have been riding a wave of hope over the past 4 trading days. Eventhough caution entered the market over the past two days, the over-riding hope is that the FED will stimulate the economy so the positions so bravely taken by speculators will turn into a significant gain.
I don't expect that the FED will oblige wall street with an August stimulus gift. From a technical point of view, we still have a bit more energy in the market that needs to dissapate. Look at the chart below:
What we are seeing on the righ hand side is my prediction for a decline in the market around August 15th, give or take two weeks. If you look at the "head and shoulders" formation on the left, you can see how the hopes for QE-3 elevated hopes before a decline. I expect that the "head and shoulders" formation on the right will have a similar pattern. As GNP growth slows, the market often rises. Called a "bear rally", there is an expectation that the momentary down turn in GNP growth is over and the market will continue an upward trend just around the corner. This is what we all want... a little down turn... everyone else to sell... and then we buy.... the market rushes upward and we gain 20%. At the end of the year, the applause rises from the investors as they recognize true genius.
This interview with Munson is shocking. Just listen and you will get the general attitude of many wall street investors. And these are the people investing your money. Let me say it like this: "Just stay out of the market!" See the interview here: http://finance.yahoo.com/blogs/breakout/archive/2.html
Tomorrow, Bernanke may stimulate the market... if so, I would be very surprised. Bernanke doesn't have many bullets left and pushing more liquidity into the market (printing money) will only aggravate the coming inflation.
ABOUT GOLD
Gold is a miserable little imp at this moment. It wants to be all grown-up, but year to date it has been a wimpy midget. This doesn't mean that the little midget might suddenly turn into the HULK, but several things need to happen for gold to burst on to the scene once again.
Inflation and a weaker dollar is the first requirement. Because of Europe's woes, the dollar looks unusually strong. Furthermore, many foreign investors are holding dollars because it is, at this time, the most stable currency.
Gold has declined and presently is in a side-ways pattern, some call it consolidation. Either gold will regain its footing or see a strong move downward. I think that when we see a strengthening of world economies, inflation will inflict its aweful punishment on economies who failed to see the power of its vengence.
Gold will be a good investment, then. (When inflation rises or the dollar loses value.) In the last six months gold has lost 7.33%. Not such a good return for 2012. Remember rule one, "Don't lose money!" I'm not in love with any company, nor any commodity; I'm only in love with winning investments.
EXERCISE CAUTION
This is the time to exercise caution. Many voices in the investment community are warning investors to "Watch-out!". It would be wise to take heed. Stick to the investment plan I gave you in May. (Go back and read the May blog.) We will worry about investing in stocks at the end of October. The market could rise... Bernanke could stimulate and bring a two or three month bull market. The problem is that no one can be sure when the market will suddenly collapse; and when it does, it collapses suddenly and without warning. Within a week, all your gains for 2012 can be erased.
Though I can't be sure, it seems like the left part of a "Head and Shoulders" pattern has formed. The hope for stimulus has driven up the left shoulder and when that collapses, investors could feel a world of hurt. Still, Bernanke could stimulate the economy in September. These kind of efforts only create an artificial market and when stimulus is removed or can no longer be sustained, the pain will be terrible. Be wise and patient, wait for the right opportunities and keep your STOP-SELL in place on all your investments.
(note: the above article is for entertainment purposes only and not to be used as investment advice.)
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