Thread: Tsunami's Account Talk

Rogers clarified: "...denied saying the U.K. pound is on the brink of collapse, but confirmed his negative views on sterling."
http://blogs.wsj.com/marketbeat/2010...pound-bearish/

Wonder if he was taking a page out of history for some private action?
"When their informers reported "the scoop" of Napoleon’s defeat at Waterloo, Rothschild agents in London started to sell stocks, acting as if the French had won."
http://www.lycos.com/info/battle-of-...bonaparte.html

Thank you Warrenim! That fits my view of reality much better. I don't think there's a imminent collapse of any sort, not yet anyway.

For those interested in Martin Armstrong, there's a long new paper from him posted today. I haven't read it, looks like it focusses on Goldman Sachs. He's got nothing to lose writing such stuff from his prison cell I guess.

http://www.martinarmstrong.org/economic_projections.htm

Thanks for the post, do you have any expectations for March?

Expectations for March.....don't want to guess quite yet, it's a tough call, like everyone else I'm waiting for the market to tip it's hand. Like other G funders I'm hoping for at least a small dip to get back in (even something like 1075 would be good enough for me) but am prepared to jump in higher if I have to since I think the market will work it's way higher until early May. I think we'll know by late Tuesday which way it's going. If doesn't start heading down hard by Tuesday, I don't think it will at all and 2/5 was indeed the low. The Elliott wavers are running out of bearish options here. My main goal for this year is to avoid taking a big loss at some point, so I'm trying to be patient and give the bears a chance to be right first, so I keep watching those charts Daneric posts for example. http://danericselliottwaves.blogspot.com/

My overall 2010 outlook remains the same. As I first pointed out on my post #106 on 2/6 on this thread http://www.tsptalk.com/mb/showthread.php?t=7701&page=4 on 2/6 we were very much in sync with the early 2007 pattern, and Tom has been showing lately that we still are. That makes a lot of sense to me fundamentally since, similar to 2007, I think we're leading up to another big drop in response mostly all of the debt issues, plus the basic demographics problem of now being beyond the peak of the baby boomer spending curve. 2010 won't follow 2007 exactly of course, analogs always break down (e.g., if the bears get their big short term drop starting next week the analog is out the window), but I do think it will be basically similar but more squished time wise, with a peak in early May and the final peak in August. Why do I think that?...a combination of all the stuff I read plus just going by Terry Laundry for the specific guesses on the timing of the main peaks, he's been too darn accurate to ignore any more, and he's free. http://www.ttheory.com If I hadn't discovered him about a year ago I'd probably be much more bearish right now, he's keeping me on the right side of things, so far.

Here's that 2007 chart again. Like August 2007, I also think we're going to get a similarly scary deep dip in early summer, probably bottoming in June.

Thanks, I tend to agree with your diagnosis. For me it's a dead even race, but I'm giving the bulls the edge here. The thing that has me the most concerned is the overseas markets and I'm wondering if they will attempt to drag us down with them. If it weren't for the Transports and small caps I'd probably be in the Bear camp.

When the market was down over a 100, I felt someone was placing bets on the line to save the market. I felt Europe was was placing money on the line to stop the market from falling. Just my opinion may be wrong.

A possible scenario to fit my expected market path of a peak in early to mid-May, followed by a correction that lasts to around mid-June, then a final rally to an August peak, could be this....

I think debt will be at the center of the coming economic tsunami. Some state governments are in nearly as bad of shape as Greece. California and Illinois are center stage and their budgets are due on 7/1/10. Around mid-May the crisis will become clear and will trigger a sharp but healthy correction from an overbought market, but the states will patch together a temporary patch by late June that allows the markets to stabilize and wobble higher one final time into August. That will be the final distribution to the "greatest fools".

As for Illinois, this is insane, there's no way out of this:

"If the state payroll was magically purged of every single employee, the annual salary savings would amount to $4 billion, less than one-third of what is needed right now to dig out of the deficit hole."

http://www.chicagotribune.com/news/l...,7172195.story

In the mean time I plan to stay on this train headed for a collapsed bridge over a canyon a bit longer, I wouldn't be surprised to see the Nasdaq surpass the 2007 highs this year to create a better looking large wave B up from the 2002 low. This sums up nicely where we are right now: http://news.goldseek.com/RickAckerman/1267081260.php

Meanwhile, on the real estate front, commercial real estate problems are escalating steadily as predicted:
http://www.zerohedge.com/article/jan...tially-and-325-

And in China, prices in some areas are escalating at 20% per month?!
http://www.telegraph.co.uk/finance/china-business/7339669/China-risks-property-bubble-as-prices-rise-20pc-a-month.html

And I didn't think it could get any worse in Detriot, but....
http://www.guardian.co.uk/business/2...oreclosures-80

Just to put some Elliott wave labels on my scenario, linked below is my (very ugly, hand-drawn with MS Paint) chart for the Nasdaq-100. I think the drop from 2000 to 2002 was wave A down, then the rally from 2002 to this August will complete wave B up, then wave C down comes from 2010 to at least 2012. The coming May peak will complete wave 3 of c of B. Wave 4 of c of B should bottom in June, then wave 5 of c of B completes the 8 year rally in August (most other index's will not get to new highs and have different wave counts). There will be the dreaded "Hindenburg Omen" in August as the distribution intensifies at the top. I haven't seen anybody with this wave count since the bears are still clinging to hopes of an imminent crash, so if this turns out to be correct I need to get my own website/newsletter.

Very interesting commentary by Brian Pretti yesterday...

"from 2004 to the equity peak in 2007, the S&P NEVER traded at a level over 5% below its 50 day moving average"...with similar patterns in other post-recession periods.

http://www.financialsense.com/Market...2010/0305.html

IF this pattern starts to repeat going forward, and since most peaks on his charts are about 5% above the 50dma, with the 50dma now at 1110, I'm not too worried about an important top next week unless it reaches 1165ish. A short-term dip is due (especially with the closing Arms ratio Friday at a very low 0.4), perhaps down to the 50dma, but I don't think we'll get a dip down to 5% below the 50dma until we first touch +5% above it.

One possible scenario, around mid-May the S&P peaks at about 1207ish, and at that point the 50dma will have reached 1150ish, then the market corrects about 10% down to ~6% below the 50dma at 1085ish (read Pretti's commentary as to why it should piece the -5% line, this will be the warning shot like in mid-2007), then it's on to the final peak in August at perhaps 1228ish, the 61.8% retrace point, but I hope even higher in a blowoff top.

Just a wild guess at this point. I wish it was that easy, we could all make 20%+ this year if it was.

Good stuff in the FSN podcasts this week too. I'm a peak oil worrier so am encourage by what Matt Simmons has to say in hour #2 about his wind/potable water/liquid ammonia project in Maine.
http://www.financialsense.com/fsn/main.php

Originally Posted by Tsunami

I think the S&P will hit 1150 in January,

Just went back to see if my latest predictions were still consistent with my very first post on 12/29/09. They are, and boy, how did I nail that first one like that?