Wednesday, 7 August 2013

Breakout attempt from steep gold downtrend. Armstrong says Dow could double. Jaitly calls for a boom. 2013-08-07

Many technical analysts remain bullish onthe stock market in the USA, the Dow 30 and the S&P500,. Some forecast 1,700 on the S&P 500 quite some time ago(now reached). Some even proposed 17,000 on the Dow (wluld be about 1,800 on the S&P) and even 2,000 on the S&P 500 index.

Sandeep Jaitly of Fekete research said in his publication in the 4th quarter of 2011:
"The general consensus is that 2012 is going to be a terrible year for the performance of global equities, the Dollar and economic activity generally.
"2012 is likely to witness the beginning of an economic boom the likes of which have never been seen."

Try Googling Sandeep Jaitly The Course of the Exchange, which is his publication title. He provides the Gold Bases Service. He and Antal Fekete are real intellects. I find their articles fascinating and intellectually challenging but sometimes a little difficult to fathom in the case of Prof Fekete, though he is VERY interesting to read.

Martin Armstrong is on today in a written interview, discussing the possibility of the Dow's doubling by 2015. No spike high yet, he says, so no bubble. No euphoria yet; too much disbelief and top calling right now, he says basically. This is not gold in 1980 or the Nikkei in 1989, nor the Nasdaq in 2000.

I have a take on this now. Stocks never really quite had their bubble.

In 1999 the Dow peaked and rolled over. No spike high. Money was flowing out of traditional stocks into the Nasdaq internet bubble stocks and into tech mutual funds (TMT stocks - technology, media, telecomms). The Nasdaq was a bubble, a classic one, burst in March 2000. The highs over 5,000 have not been anywhere near seen since.

In 2007, traditional stocks were booming again but so were debt instruments, property and commodities. Stocks peaked in late 2007 and the money was flowing into gold, silver and oil. Stocks were only part of a much larger bubble. No spike high occurred in stocks (compare to oil!) so still no bubble, perhaps?

So, NOW is when we are getting the general stock market bubble. Property is down, gold is down, oil is below its 2008 highs, bonds may have topped (not certain). Stocks are probably the only game in town. Maybe NOW is when we are going to get the mania in the stock market. Maybe it has a way to go, who knows?

It is interesting also that the dollar has been strongish in recent years, as in the early to mid 1990s as stocks took off and gold was in a BEAR market. Like now. Maybe this will continue - who knows? Or like 1982 when stocks took off and gold entered a bear market.

The path of interest rates does not quite fit in this model; in previous occasions they were starting to fall. This time - well, are they rising or could they fall even more?

The markets are a mystery to unravel!

Talking of mysteries, now to gold. Gold has posted a small breakout from its steep downtrend that I have been watching closely.

Where from here? Who knows? This is a trader's nightmare. See captions on the following two charts, one fromlate last night and one from this afternoon (7 Augut 2013):


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