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This
article seeks to update the recent stocks stealth market and U.S. Dollar bull
market analysis.
Stocks
Stealth Bull Market Crushes Bears Hopes (Again).
The
weeks price action on the major indices once more illustrated the dangers of
letting emotions influence ones judgment when it comes to trading and investing.
Which was never more evident than during the early week correction that once
more suckered many bearish commentators into calling an end to the 'bear'
market rally, right from the top of the analysts food chain right through to
the bottom. Again nothing new was called on to justify FIGHTING against the
trend other than references to the 1930's depression era rally! Well Shall I
let you into a little secret ?
EVERY
BEAR MARKET / MAJOR CORRECTION IN THE STOCK MARKET since the Great Depression
HAS BEEN COMPARED TO THE 1930's BEAR MARKET RALLY BUT NEVER ONCE HAS IT
REPEATED !
The
only way people REALLY learn from their analysis mistakes is by getting
burned in their trading account / portfolio balances, nothing else works,
analysts and economists living in ivory towers will never learn!
Look,
I beat the GREAT CRASH! Yes that still means 1987 ! BUT being naive, and
young at the time, I believed in the 1930's DEPRESSION model and the FIFTH of
a FIFTH on Elliott Wave which I learned within a short period of reading
Asimov's foundation series therefore was primed to believe in elliott wave
being a manifestation of psycho-history, What did I know? After all it all
seemed highly convincing, so I fought against what had actually made me a
fortune during the crash and continued to view each post crash peak as a
shorting opportunity for a good year ! Much as the bears are doing so today !
This is 2009 and NOT 1930 ! and the Markets DO NOT REPEAT ! It is ALWAYS
DIFFERENT EACH TIME!
If
your finding yourself keep shorting this rally then you seriously need
reappraise as to why you are fighting against the price by means of the
diffusion responsibility onto indicators, fundamentals, theories, historical
patterns and such like which is not what you are actually trading !
It is
simple, you stick to the direction that increases your account balance! Don't
try to THINK to hard about it! It is THINKING that will be your downfall.
Where trading is concerned, THINKING is not good, in fact if you THINK too
much you may wake up one day some years down the road to wonder, what the
hell have I been doing for the past 3 years???? I have learned all these
wonderful theories that produce diddly squat when it comes to actually making
money!
Here's
a tip for if your stuck in a losing streak, SCRAP everything you know and use
a coin toss to pick the direction, then focus on the proper application of
money management (i.e. targets, stops, stop and reverse, adjusting position
sizes etc), and see whether or not you start to make money or not ;). I
demonstrated the winning coin toss trading system 5 years ago on in REAL TIME
on moneytec.com (Mr 50%) trading the British Pound That yielded a 380 pip NET
profit over ONLY 11 trades. Also ensure to bookmark walayatstreet.com, which
when when its live will cover REAL TIME TRADING (100% FREE).
Stocks
Stealth Bull Market Road Map into October 2009 - July 23rd 2009 Conclusion
 
CONCLUSION
- My earlier fears about a bull trap appear to be unfounded, the stock chart is
talking that we are in a stocks bull market, and is suggestive of a trend
higher towards a 2009 target of between 9750 and 10,000, with a high
probability that we may get there before the end of October!. Key danger
areas for this scenario are a. for the trend line to contain corrections, and
b. that 8080, MUST HOLD.
Current
Price Action
The
Price action to date has shown relative strength against the forecast of a
month ago, this suggests a higher target than the original 9750 to 10K before
the end of Oct 2009, the secondary stated target was 10,450. However it also
suggests that the market may put in an earlier peak. I am still leaning
towards the next correction AFTER the peak to be of greater significance than
the last correction from June to July. Also, whilst my in depth economic
analysis is on the UK economy, however much of the conclusions could equally
be applied to other western economies, the analysis of February 2009 has been
projecting towards a a DOUBLE DIP recession (updated June 09) which has
negative implications for stocks during 2010, but for now DON'T be silly,
don't fight the stocks bull market (time to drop the word stealth). To keep
up to date on the state of the stocks bull market, ensure your subscribed to
my always free newsletter.
Financial
Crisis Worst is Not Over?
Robert
Prechter in his latest 10 page Elliott Wave Theorist Newsletter states that
financial crisis is NOT over and gives a warning he's never had to include in
30 years of analysis, Read it now for free!.
U.S. Dollar
Bull Market - 14th August 2009 - Conclusion
Conclusion
The
USD at 78.40 is not far off its recent low of 77.40, so whether or not it
breaks below 77.40 before going higher, the overall conclusion is positive
for the US Dollar to exhibit a volatile uptrend into the end of 2009 and
probably beyond. Key resistance lies at USD 90, which it should achieve
before year end. This scenario remains in force unless the USD breaks below
75. The implications of a dollar bull run is generally bearish for commodities
such as gold, which I will cover in a future newsletter
Current
Price Action
The
U.S. Dollar reversed direction after failing to break above 80 and still some
way below the confirming trigger of 81. The corrective move to date is of
little consequence to the forecast which remains as is.
The
most recent price action implies the following -
a.
That the USD puts in a double bottom before busting through above 80/81 for a
strong rally.
b. A
break below 77.40 would trigger a sharp drop towards 75.80 which would
seriously risk a re-evaluation of the whole dollar bull market scenario which
would be negated on a break below 75.00.
At
this point in time I continue to favour outcome a. over b.
To keep up to
date on the state of the USD, ensure your subscribed to my always free
newsletter.
Nadeem Walayat
Market Oracle.com.uk
Nadeem Walayat is
the editor of MarketOracle.co.uk.and has over 20 years experience in trading
and investing.
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