Hello BBTL Blog readership,
When I returned to work after the Christmas and New Years seasonal holiday, I was perturbed by the fact that the first thing that came to my attention in the New Year was the bad conduct, ill behavior and wordy attacks on KRTT, myself as blog editor, being placed on this blog in comments and forwarded to my email box.
A number of these offenders demanded that I immediately post updates and went on to blame this blog (and thus KRTT) for potential ill advice and their losses.
The majority were posted in the comments section of this blog which has now been closed down.
Unfortunately, I take these challenges and hurtful comments seriously, as I do this blog.
I have warned about such similar issues in the past (albeit not recently), and they will no longer be tolerated.
I have a limited number of hours that I can devote to a free blog each week. I have less time and patience regarding nonsense, disruption to KRTT routine, our affiliates, our clients, or anyone acting for or as KRTT staff.
Worse, the insults, lies, and demands being leveled are carried out by a small number of dysfunctional people.
Although these offenders are indeed a very small minority, their ill-behavior which is carried out under the guise of internet anonymity, must be addressed and stopped. If I cannot find a suitable solution I will close the blog down.
Currently be advised that this blog (and all blogs) have the potential to closely track computer IP addresses. As example we have identified one of the posting offenders as being from Phoenix in Arizona. Additionally there have been repeat offenses from Pakistan.
As a result of the time wasted in my investigation there will be no posts, until approximately January 22- 30th when I hope to have made a final decision and create a potential solution.
I will make a final decision before February 2013 and post it.
Lesson For Everyone
Society has a joint responsibility for their actions, as do individuals.
Already, several aspects of the information age, the internet and websites in general are being adversely exploited by those that chose the low road, and seek to do harm. It is our joint responsibility as society to police and protect our newest technologies, or else we will lose them.
I was also reminded of similar experiences years ago when acting as a PRO of many years working in professional capacities with Wall Street and Bay Street financial firms.
Occasionally, one comes across an ill-behaved client. Often but more rarely they may even have considerable amounts of money, but equally they have invariably refused to gain a financial or investment education.
Besides a clear lack of a proper financial education, these types will refuse to use stops when trades or investments go against them, despite the fact that stop losses have been preached about and advised for decades.
This of course, is why capital protection becomes critical, - especially for those with less financial education or experience (and all conservative investors or traders).
When their life and investments do not work for them, as a direct result of their own ignorance and failure to use and apply common sense, they level extreme criticism onto others.
Worse, they act as if they did not know about risk, and often tell others that were never advised about the risk involved.
However, the one common trait that all of these dysfunctional investors or traders share, is their absolute refusal to accept personal responsibility for their own actions.
In essence they play the "blame others" game.
Savvy and experienced investment pros and financial firms at all levels have learned (the hard way) to quickly spot these dangerous investors and traders, and as a result, they can routinely have their accounts closed or be asked to leave the investment firm.
The risk in allowing these types to continue investing or acting under the disguise of ignorance and no responsibility, is that after their losses and failures pile up, they can often resort to hiring lawyers, whom for any fee will sue financial firms and advisers, for what should have been immediately seen as their own ignorance and failure and refusal to accept personal responsibility.
Again, I will make a final decision about changes to this blog by February.
I value everyone's feedback (assuming of course it is worded politely). Your comments and suggestions may be forwarded to bbtlblog@KRTT.com
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
Monday, January 14, 2013
Wednesday, December 19, 2012
Slippery Slope of Hope
Hello BBTL Blog readership,
The Christmas Message (opinion)
Despite some minor seasonal bullishness after the October - November sell-off in equities, the current month of December has done little-to-nothing to change my "bigger and more important trend and cycle picture" which has a decidedly bearish outlook going into 2013.
That stated, I reiterate and point out, that I employ a more research-based analytical approach to financial analysis, rather than rely on Ben Bernanke, the FED tactics, or "the slippery slope of hope".
Many lately (including pros) have been a little surprised by the December refusal of equity markets to sell-off given the looming significant world problems - including the USA.
Despite the important mega-issues surrounding the sixteen trillion dollar USA national debt, and large near trillion dollar current deficit, termed as the "fiscal cliff"; it almost seems illogical that so many USA (and global) investors refuse to vote with their "sell-side tickets" lately.
Why? Is no one scared?
It certainly seems that way. However. the necessary confidence factor is indeed being actively managed by governments.
But maintaining "investor confidence" and the value of the USA monetary unit given the mega-sovereign debt of the USA and swelling FED money printing, indeed is a perilous slope.
Worse there is moral hazard, risks, and obstacles everywhere. None of these have stopped the FED.
Consider that in mid 2011, when President Obama asked for a temporary spending extension, the heated Congressional debate about USA tax increases and spending cuts created a panic sell-off in equities in the late summer of 2011.
How attitudes in America and globally have changed just one year later.
Evidently, it seems investors are being told; that there will always be more than enough money for governments to simply spend as they please - by printing even more money. Thus, there is this no need to worry.
We now have a new excuse; - HOPE.
So, is America somehow in an obvious denial that a real sovereign debt problem exists?
Or, if there is an acknowledged problem; can it simply be swept under the carpet and ignored; - forever?
The most important factor at the government level, is to maintain investor confidence, - so no one panics and starts the stampede for the exit door (in currencies, bonds and stocks).
Perhaps, there is an illusion of hope that a new USA fiscal debt solution might be achieved without economic pain or harsh austerity programs.
Meanwhile, the FED led by Bernanke and recent Chicago FED Evans, have a new plan to keep interest rates at zero rates almost forever and balloon the FED balance sheet to the moon in an outright USA monopoly-money printing extravaganza.
Recklessly, when the FED recently linked monetary policy and the FED money-printing and zero rate policy efforts directly to the USA unemployment issues, they were very clearly being extremely deceitful both professionally as fiduciaries, and even as skilled economists.
Any reasonably intelligent economist knows that "effective" or employment solutions can only be sought out with fiscal or state policy, which the FED has absolutely no control over. Ever low interest rates, do almost nothing for the unemployed and are like pushing on a monetary rope. American corporations already have arsenals of cash hoarded, - and have thus proven this point.
Moreover, FED tactical desperation is being shown repeatedly in that the FED is now forever broad-casting their intentions - years in advance, by suggesting that these programs are in place until at least 2015.
In contrast, to effective FED leadership, one of the former powerful tools of FED moral suasion by acting in complete "surprise announcements" (deliberately not broadcasting intentions in advance) was used to change the course of economies going the wrong way, and has been thrown to the wind.
Moreover, the "puppet rallies" every time the FED FOMC meets and deliberates after two days, smacks of market manipulation. Ben Bernanke's big ego is being matched by Wall Street and USA PPT dollars.
So again, America is being deliberately trained "to think (and thus act)" that the FED - never will deliver bad news. In my personal view, these are cumulative and the signs of "a very desperate" Federal Reserve.
But frankly, none of this really matters. It is not words that matter, - but actions.
What matters financially to everyone, is putting capital protection ahead of the demands for profit. Based on the recent actions of naive investors, a repeat of financial pain may be necessary.
As always, let's now turn to the technical trend and cycle truth; for some facts.
Charts (truth and fact not based on opinion)
Here are a just a few of the comments provided to KRTT clients earlier this month in our paid products:
1. December is the most bullish statistical month of the year. This has worked for decades. As example, five of the last six years (thus including bearish years) or 83% have been up. A good estimate of an average statistical gain is between 1 - 2 %. (fact)
2. Using an average gain of 1.5%, a December SP 500 close was thus estimated to be up 21 points. Given that December 1st began at the 1416 level (SP 500) , this statistical measure estimated a December 2012 close in the SP 500 of 1437. (fact)
3. KRTT showed clients four important and known reliable cycles that clustered in the area of December 19 - 21. Some of these cycles were KRTT proprietary, whereas others were W.D. Gann or harmonic related time cycles. (fact)
4. The Elliott Wave (EW) count derived by KRTT and also software products used at KRTT showed a potential to terminate an EW C Wave (up) in this exact same cycle date range. Given that trading volume will be light until the end of December, this EW count casts a bearish outlook solely from an EW perspective in January 2013. (see 60 minute chart below)
5. Statistically, the first year of the Presidential Election cycle is not a favorable one for equities. (statistical fact) Year one and two are also the two worst years during the four year election cycle.
6. The last or final bullish right-hand shoulder rally (think technical head and shoulders patterns at tops) in the beginning or entry to a new bear market is often considered a "blind bullish" shoulder that can retrace all the way back to the 78.6% level (Fibonacci math). This same Fib retracement level from the former 2012 SP500 index peak of 1474, to the mid November low of 1343, happened just yesterday (December 18, 2012) at the 1446 level (SP 500). (see daily chart)
This 78.6% statistic Fib %R, can be confirmed by doing statistical analysis of previous market tops - prior to sell-offs. (fact)
See that charts below for more clues and lessons.
Chart the trend, spot the trend, and go with it.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
The Christmas Message (opinion)
Despite some minor seasonal bullishness after the October - November sell-off in equities, the current month of December has done little-to-nothing to change my "bigger and more important trend and cycle picture" which has a decidedly bearish outlook going into 2013.
That stated, I reiterate and point out, that I employ a more research-based analytical approach to financial analysis, rather than rely on Ben Bernanke, the FED tactics, or "the slippery slope of hope".
Many lately (including pros) have been a little surprised by the December refusal of equity markets to sell-off given the looming significant world problems - including the USA.
Despite the important mega-issues surrounding the sixteen trillion dollar USA national debt, and large near trillion dollar current deficit, termed as the "fiscal cliff"; it almost seems illogical that so many USA (and global) investors refuse to vote with their "sell-side tickets" lately.
Why? Is no one scared?
It certainly seems that way. However. the necessary confidence factor is indeed being actively managed by governments.
But maintaining "investor confidence" and the value of the USA monetary unit given the mega-sovereign debt of the USA and swelling FED money printing, indeed is a perilous slope.
Worse there is moral hazard, risks, and obstacles everywhere. None of these have stopped the FED.
Consider that in mid 2011, when President Obama asked for a temporary spending extension, the heated Congressional debate about USA tax increases and spending cuts created a panic sell-off in equities in the late summer of 2011.
How attitudes in America and globally have changed just one year later.
Evidently, it seems investors are being told; that there will always be more than enough money for governments to simply spend as they please - by printing even more money. Thus, there is this no need to worry.
We now have a new excuse; - HOPE.
So, is America somehow in an obvious denial that a real sovereign debt problem exists?
Or, if there is an acknowledged problem; can it simply be swept under the carpet and ignored; - forever?
The most important factor at the government level, is to maintain investor confidence, - so no one panics and starts the stampede for the exit door (in currencies, bonds and stocks).
Perhaps, there is an illusion of hope that a new USA fiscal debt solution might be achieved without economic pain or harsh austerity programs.
Meanwhile, the FED led by Bernanke and recent Chicago FED Evans, have a new plan to keep interest rates at zero rates almost forever and balloon the FED balance sheet to the moon in an outright USA monopoly-money printing extravaganza.
Recklessly, when the FED recently linked monetary policy and the FED money-printing and zero rate policy efforts directly to the USA unemployment issues, they were very clearly being extremely deceitful both professionally as fiduciaries, and even as skilled economists.
Any reasonably intelligent economist knows that "effective" or employment solutions can only be sought out with fiscal or state policy, which the FED has absolutely no control over. Ever low interest rates, do almost nothing for the unemployed and are like pushing on a monetary rope. American corporations already have arsenals of cash hoarded, - and have thus proven this point.
Moreover, FED tactical desperation is being shown repeatedly in that the FED is now forever broad-casting their intentions - years in advance, by suggesting that these programs are in place until at least 2015.
In contrast, to effective FED leadership, one of the former powerful tools of FED moral suasion by acting in complete "surprise announcements" (deliberately not broadcasting intentions in advance) was used to change the course of economies going the wrong way, and has been thrown to the wind.
Moreover, the "puppet rallies" every time the FED FOMC meets and deliberates after two days, smacks of market manipulation. Ben Bernanke's big ego is being matched by Wall Street and USA PPT dollars.
So again, America is being deliberately trained "to think (and thus act)" that the FED - never will deliver bad news. In my personal view, these are cumulative and the signs of "a very desperate" Federal Reserve.
But frankly, none of this really matters. It is not words that matter, - but actions.
What matters financially to everyone, is putting capital protection ahead of the demands for profit. Based on the recent actions of naive investors, a repeat of financial pain may be necessary.
As always, let's now turn to the technical trend and cycle truth; for some facts.
Charts (truth and fact not based on opinion)
Here are a just a few of the comments provided to KRTT clients earlier this month in our paid products:
1. December is the most bullish statistical month of the year. This has worked for decades. As example, five of the last six years (thus including bearish years) or 83% have been up. A good estimate of an average statistical gain is between 1 - 2 %. (fact)
2. Using an average gain of 1.5%, a December SP 500 close was thus estimated to be up 21 points. Given that December 1st began at the 1416 level (SP 500) , this statistical measure estimated a December 2012 close in the SP 500 of 1437. (fact)
3. KRTT showed clients four important and known reliable cycles that clustered in the area of December 19 - 21. Some of these cycles were KRTT proprietary, whereas others were W.D. Gann or harmonic related time cycles. (fact)
4. The Elliott Wave (EW) count derived by KRTT and also software products used at KRTT showed a potential to terminate an EW C Wave (up) in this exact same cycle date range. Given that trading volume will be light until the end of December, this EW count casts a bearish outlook solely from an EW perspective in January 2013. (see 60 minute chart below)
5. Statistically, the first year of the Presidential Election cycle is not a favorable one for equities. (statistical fact) Year one and two are also the two worst years during the four year election cycle.
6. The last or final bullish right-hand shoulder rally (think technical head and shoulders patterns at tops) in the beginning or entry to a new bear market is often considered a "blind bullish" shoulder that can retrace all the way back to the 78.6% level (Fibonacci math). This same Fib retracement level from the former 2012 SP500 index peak of 1474, to the mid November low of 1343, happened just yesterday (December 18, 2012) at the 1446 level (SP 500). (see daily chart)
This 78.6% statistic Fib %R, can be confirmed by doing statistical analysis of previous market tops - prior to sell-offs. (fact)
See that charts below for more clues and lessons.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
Friday, December 7, 2012
A Lump of Coal
Hello BBTL Blog Readership,
My update this week is short due to my busy year-end schedule.
Santa is checking his list carefully at this time of year, and frankly based on my research analysis at year end, I would suggest that Santa might soon leave a lump of coal in the all-too-greedy bull stockings hung ready on the chimney.
The smarter or more observant market players whom paid closer attention to the real global economy and declining fundamental factors, already realized they have had a good thing going this past year, and more realistically exited the financial markets earlier over recent months to collect their joyous tidings.
As thankful teddy "bears", they have already placed their milk and cookies out for Santa. We will all know before the end of January 2013, whether or not Santa Claus rewarded the bears of bulls best in the coming festive season.
Although the SP500 has held up relatively well this week, in my view thanks to the more optimistic seasonal influences (no-one likes to be a bear or a pessimist at this time of year), the chart and cycle patterns are shouting out big warnings not to become overly greedy.
Perhaps what is most interesting is how quickly history and financial market lessons are forgotten.
By example, in the late summer of 2011, USA equity indices plunged into a mini-crash and near bear market, while the Congress and USA government went into financial crisis about running out of money.
That prelude to the fiscal cliff crisis luckily ended with absolutely no pain of any higher USA taxes or decreased government spending. Instead in 2011, the Obama administration was simply allowed to just keep on spending and thus the USA printed the needed money.
However, we all know that the coming January fiscal cliff debate will not pass by Congress or USA citizens as easily.
As for the real coming fiscal cliff, this time around, the USA politicians, no matter how creative or innovative will clearly have to endure some "real hardships" (like every other sovereign nation that had overspent) including higher taxes and reduced government spending.
For now at least, any potential for USA fiscal cliff hardships in 2013 or a more serious economic crisis is simply being ignored by the USA at large (it is not priced into the market). This situation could change abruptly and drastically.
Further, while like all the technical elves, I have been busy analyzing my own sell-side bearish research that I routinely put forward to KRTT clients, surprisingly I have also have come across some very on-target bearish research by extremely bright economists and financial analysts that agree with my negative outlook for 2013.
The two potential logical conclusions are; one - that very bright analytical minds are bearishly correct, and meanwhile the all-too-greedy money managers on Wall Street have simply been too busy to sell while indulging in their two and three Martini pre-Christmas lunches.
Alternatively we as pessimistic bears, have simply missed something, or perhaps that 2013 will unfold into a soft-landing with Central Banks continuing to stimulate and money print forever, until all countries are equally irresponsible and broke.
As usual I strongly teach that the trend and cycle charts are where the financial truth lies, and also where I place my faith and bets.
See below for my usual chart teachings and truth.
Chart the trend, spot the trend, and go with it.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
My update this week is short due to my busy year-end schedule.
Santa is checking his list carefully at this time of year, and frankly based on my research analysis at year end, I would suggest that Santa might soon leave a lump of coal in the all-too-greedy bull stockings hung ready on the chimney.
The smarter or more observant market players whom paid closer attention to the real global economy and declining fundamental factors, already realized they have had a good thing going this past year, and more realistically exited the financial markets earlier over recent months to collect their joyous tidings.
As thankful teddy "bears", they have already placed their milk and cookies out for Santa. We will all know before the end of January 2013, whether or not Santa Claus rewarded the bears of bulls best in the coming festive season.
Although the SP500 has held up relatively well this week, in my view thanks to the more optimistic seasonal influences (no-one likes to be a bear or a pessimist at this time of year), the chart and cycle patterns are shouting out big warnings not to become overly greedy.
Perhaps what is most interesting is how quickly history and financial market lessons are forgotten.
By example, in the late summer of 2011, USA equity indices plunged into a mini-crash and near bear market, while the Congress and USA government went into financial crisis about running out of money.
That prelude to the fiscal cliff crisis luckily ended with absolutely no pain of any higher USA taxes or decreased government spending. Instead in 2011, the Obama administration was simply allowed to just keep on spending and thus the USA printed the needed money.
However, we all know that the coming January fiscal cliff debate will not pass by Congress or USA citizens as easily.
As for the real coming fiscal cliff, this time around, the USA politicians, no matter how creative or innovative will clearly have to endure some "real hardships" (like every other sovereign nation that had overspent) including higher taxes and reduced government spending.
For now at least, any potential for USA fiscal cliff hardships in 2013 or a more serious economic crisis is simply being ignored by the USA at large (it is not priced into the market). This situation could change abruptly and drastically.
Further, while like all the technical elves, I have been busy analyzing my own sell-side bearish research that I routinely put forward to KRTT clients, surprisingly I have also have come across some very on-target bearish research by extremely bright economists and financial analysts that agree with my negative outlook for 2013.
The two potential logical conclusions are; one - that very bright analytical minds are bearishly correct, and meanwhile the all-too-greedy money managers on Wall Street have simply been too busy to sell while indulging in their two and three Martini pre-Christmas lunches.
Alternatively we as pessimistic bears, have simply missed something, or perhaps that 2013 will unfold into a soft-landing with Central Banks continuing to stimulate and money print forever, until all countries are equally irresponsible and broke.
As usual I strongly teach that the trend and cycle charts are where the financial truth lies, and also where I place my faith and bets.
See below for my usual chart teachings and truth.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
Thursday, November 29, 2012
Decision Point - Bull or Bear
Hello BBTL Blog Readership,
The missing blog posting last week was simply due to a busy schedule and several technology and software upgrades that were occurring to better serve KRTT clients.
In the meantime, the shorter term USA Thanksgiving seasonal rally, that I had highlighted in my last blog post indeed took place as predicted. Moreover, the rally has carried on "somewhat" this week.
So now what? Are you ready for change and a possible U turn in the market direction if it happens?
Well as always, good traders and successful proactive investors are defined by their open minds and the willingness to change. After all, the financial markets are dynamic - albeit governed by Natural Law and cycles, little different than the cycles in the weather seasons, day and night, birds migrating or the sunspot cycle.
To state a simple forecast perspective in my financial research position at present, the next two weeks should set apart and absolutely define the bull market versus bear market position.
I think everyone reading this blog already knows what my personal position is, and frankly, has been for several weeks.
If you do not understand that statement, then I suggest that you go back and read the older blog posts beginning in early July with my sixteen week bear market countdown to a fall 2012 market high.
Alternatively, you can read my feature strongly suggesting - "Sell the Ben Bernanke High" announcement immediately after the FED QE3 news which indeed accurately turned out to be the record high for the year.
However, if the bears are in control they must soon come out of their temporary hiding in recent trading sessions, which has now seen the SP 500 Index rise from a November 16th, 2012 low at 1344, to the recent high close (today) at the 1416 price level.
By the way, this recent rally represents a Fibonacci Retracement of 72 points or about a 55% R from the yearly high at 1474 in September with two near 1470 highs in October.
Assuming the bears really stay in control in the near term, the SP 500 is not likely to get much above a 61.8% Fib retracement which is a mere 8 points above today's 1416 close.
Also if the bears are in "true control" and the USA equity indices avoid an all out messy dragged out top into early 2013, then frankly (and scary for the bulls), this recent equity rally high will be the last right hand shoulder high on a chart, before a more serious correction sets in, that could soon confirm further equity losses and a probable impending bear market.
As I have stated before, I use a 20% loss or more as a bear market, and anything less as a correction.
On the optimistic side, if the bulls can somehow regain a firmer grip on USA and Canadian equities to extend the 2012 equity rally run, into the seasonally optimistic December Christmas season at year end, than we should soon see (by next week), a clear-cut equity breakout to at least the top of standard deviation channels.
At present this would put the SP500 up around the 1438 - 1444 level, or about 22 points higher.
Most savvy traders and investors, never try to predict and tell the market "what to do", but rather become seasoned experts at quickly reacting to the news and chart truth.
In other words, investing and then hoping your financial strategy turns out for the best, is usually not as profitable as being proactive and becoming a trained observer of what is happening on the technical charts (which tell the trend and cycle truth).
In my own view (for what it's worth) intellectually at present, I find it very difficult to place a bullish financial bet on the USA government and US politicians properly addressing the sixteen trillion dollar USA national debt crisis, enacting the needed higher USA taxes, and drastically reducing their government spending - all being called the 2013 "fiscal cliff."
So frankly based on the history and track record of politicians, all of the bulls out there, and those with long equity and commodity portfolios at present, are essentially putting their faith and their money bet exactly where Washington and the USA FED wants it; - stay invested.
Meanwhile the bears, based on the recent weeks of trading activity, have been subtly heading for the exit door. December will surely be an interesting month to watch.
It seems to me that sometimes, the best portfolio and trading strategy for many of the less sophisticated or risk adverse is to be on the financial sidelines (out - but waiting to get back in). This may well be one of those excellent times.
One thing is clear.
The next two weeks and December as a whole will logically tell us whether the bulls or bears will be the victor in the next few months. The fiscal cliff may or may not be an ongoing topic of concern into 2013. Time will tell.
See the chart trend and cycle truth below for more.
Chart the trend, spot the trend, and go with it.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
The missing blog posting last week was simply due to a busy schedule and several technology and software upgrades that were occurring to better serve KRTT clients.
In the meantime, the shorter term USA Thanksgiving seasonal rally, that I had highlighted in my last blog post indeed took place as predicted. Moreover, the rally has carried on "somewhat" this week.
So now what? Are you ready for change and a possible U turn in the market direction if it happens?
Well as always, good traders and successful proactive investors are defined by their open minds and the willingness to change. After all, the financial markets are dynamic - albeit governed by Natural Law and cycles, little different than the cycles in the weather seasons, day and night, birds migrating or the sunspot cycle.
To state a simple forecast perspective in my financial research position at present, the next two weeks should set apart and absolutely define the bull market versus bear market position.
I think everyone reading this blog already knows what my personal position is, and frankly, has been for several weeks.
If you do not understand that statement, then I suggest that you go back and read the older blog posts beginning in early July with my sixteen week bear market countdown to a fall 2012 market high.
Alternatively, you can read my feature strongly suggesting - "Sell the Ben Bernanke High" announcement immediately after the FED QE3 news which indeed accurately turned out to be the record high for the year.
However, if the bears are in control they must soon come out of their temporary hiding in recent trading sessions, which has now seen the SP 500 Index rise from a November 16th, 2012 low at 1344, to the recent high close (today) at the 1416 price level.
By the way, this recent rally represents a Fibonacci Retracement of 72 points or about a 55% R from the yearly high at 1474 in September with two near 1470 highs in October.
Assuming the bears really stay in control in the near term, the SP 500 is not likely to get much above a 61.8% Fib retracement which is a mere 8 points above today's 1416 close.
Also if the bears are in "true control" and the USA equity indices avoid an all out messy dragged out top into early 2013, then frankly (and scary for the bulls), this recent equity rally high will be the last right hand shoulder high on a chart, before a more serious correction sets in, that could soon confirm further equity losses and a probable impending bear market.
As I have stated before, I use a 20% loss or more as a bear market, and anything less as a correction.
On the optimistic side, if the bulls can somehow regain a firmer grip on USA and Canadian equities to extend the 2012 equity rally run, into the seasonally optimistic December Christmas season at year end, than we should soon see (by next week), a clear-cut equity breakout to at least the top of standard deviation channels.
At present this would put the SP500 up around the 1438 - 1444 level, or about 22 points higher.
Most savvy traders and investors, never try to predict and tell the market "what to do", but rather become seasoned experts at quickly reacting to the news and chart truth.
In other words, investing and then hoping your financial strategy turns out for the best, is usually not as profitable as being proactive and becoming a trained observer of what is happening on the technical charts (which tell the trend and cycle truth).
In my own view (for what it's worth) intellectually at present, I find it very difficult to place a bullish financial bet on the USA government and US politicians properly addressing the sixteen trillion dollar USA national debt crisis, enacting the needed higher USA taxes, and drastically reducing their government spending - all being called the 2013 "fiscal cliff."
So frankly based on the history and track record of politicians, all of the bulls out there, and those with long equity and commodity portfolios at present, are essentially putting their faith and their money bet exactly where Washington and the USA FED wants it; - stay invested.
Meanwhile the bears, based on the recent weeks of trading activity, have been subtly heading for the exit door. December will surely be an interesting month to watch.
It seems to me that sometimes, the best portfolio and trading strategy for many of the less sophisticated or risk adverse is to be on the financial sidelines (out - but waiting to get back in). This may well be one of those excellent times.
One thing is clear.
The next two weeks and December as a whole will logically tell us whether the bulls or bears will be the victor in the next few months. The fiscal cliff may or may not be an ongoing topic of concern into 2013. Time will tell.
See the chart trend and cycle truth below for more.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
Thursday, November 15, 2012
Convoluted Logic
Hello BBTL Blog readership,
The missive for this update is to briefly describe a reason why the global financial markets may be in far more trouble than most currently realize. That reason is; "convoluted, or failed logic".
Given the more serious nature and the abundance of global economic and financial problems, one should normally conclude that "politics matters" and therefore, global politicians and leaders everywhere would be legitimately working on logical non-partisan solutions.
Convoluted Logic - Consider the following....
1. The USA faces a daunting amount of national debt and a fiscal cliff that has caught world attention. So, what has happened recently? USA politicians attitudes about the solutions to the fiscal cliff have recently hardened.
Worse, Republicans insist that they will accept no tax hikes. This is amusing.
Have Republicans even looked at Europe, whereby almost every country indebted has accepted harsh austerity programs including tax increases.
Evidently Republicans think the USA should not suffer for their past debt mistakes - especially the rich. Try ignoring the fiscal cliff problem much longer and the consequences will be much more harsh than mere tax increases.
Politicians were never known for their intellect. Even the USA rating agencies are implying that the USA politicians must put aside their partisan views.
2. What about the USA economy, high US unemployment and the FED?
Well for years now, the USA FED implied they have everything in hand. The FED solution was simply to do more bailouts, keep interest rates at sub par near zero levels, and to print more money.
I guess one should conclude by the FED's recent silence, that their past plans of spending massive amounts of money did not work.
Convoluted or failed government logic is not limited to the USA politicians only, and frankly, is found everywhere, especially in the highest government leader levels.
Sadly, unless the logic for the needed government solutions improves dramatically, - the problems will never go away and may well get worse. Governments are famous for crisis management, which simply implies a lack of prior judgement or incompetency.
Here are a few more examples.
3. In the Eurozone it was obvious that after years of trying that Greece, was unable to make the required progress (according to the Eurozone lenders) to cut national debt and pay back a portion of their debt.
The solution recently from the leaders was to lend Greece more money and provide more time.
Voila - problem solved according to the Eurozone leaders.
4. In Canada, the federal government and the Bank of Canada have warned Canadians repeatedly that their household debt is far too high (record historic highs) and stated publicly that Canadians should pay down their loans.
So, what action did the bank of Canada take? They lowered interest rates to near zero and kept them there.
What did Canadian households do?
They borrowed and leveraged even more money on speculative bets.
Evidently, the Bank of Canada and the Canadian Federal Government are surprised and do not understand why Canadians are not listening and continue to borrow even more.
Canada needs new fighter jets in their military. A military that has been constantly downsized from more than 250 fighter aircraft to less than fifty.
Canada also has other serious and strategic deficiencies from downsizing in areas such as schooling, healthcare, and policing.
The government plan and a typical solution is to buy 35 ultra-expensive stealth fighters from the USA to protect Canada. Keep in mind Canada could have purchased as many as 200 - 300 new and upgraded F16's and F18's, that might have been a step in the right direction of rebuilding Canada's lost respect and the defense of Canada.
Canada's Federal Government also plans to spend less on hospitals and healthcare, yet Canada's government pensions for politicians are the most lucrative of all Canadian pensions and at record highs.
It is easy to see that Canadian politicians (like many global politicians) are true civil servants and not in it for themselves.
Technical Trend and Cycle Truth
See the charts below.
The SP 500 is oversold. Limited panic selling at this point would be a sign of a short term bottom.
Aggressive and nimble upside thinking traders may soon wish to place a bet when they see a rounding chart bottom, but they should be careful that hey do not get in front of a bearish freight train and use stops.
Equities can stage a rally from support at this current level (SP 500 ~ 1355) if can hold for (tomorrow) Friday, but probabilities of a ST rally increase to very strong chances of a bounce about 30 points lower, near the 1320 level in the SP 500 Index.
The most probable week (time) of a turn up in the month of November, for USA equities is; next week since the USA Thanksgiving and black Friday is traditionally a short-term optimistic seasonal period for US equities.
Any break below the 1300 level in the SP500 would imply very real panic selling and could cause the SP 500 to drop another 50 points quickly to about the 1250 level.
The major trend is down but counter trend rallies are a normal part of all financial markets and expected.
Chart the trend, spot the trend, and go with it.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
The missive for this update is to briefly describe a reason why the global financial markets may be in far more trouble than most currently realize. That reason is; "convoluted, or failed logic".
Given the more serious nature and the abundance of global economic and financial problems, one should normally conclude that "politics matters" and therefore, global politicians and leaders everywhere would be legitimately working on logical non-partisan solutions.
Convoluted Logic - Consider the following....
1. The USA faces a daunting amount of national debt and a fiscal cliff that has caught world attention. So, what has happened recently? USA politicians attitudes about the solutions to the fiscal cliff have recently hardened.
Worse, Republicans insist that they will accept no tax hikes. This is amusing.
Have Republicans even looked at Europe, whereby almost every country indebted has accepted harsh austerity programs including tax increases.
Evidently Republicans think the USA should not suffer for their past debt mistakes - especially the rich. Try ignoring the fiscal cliff problem much longer and the consequences will be much more harsh than mere tax increases.
Politicians were never known for their intellect. Even the USA rating agencies are implying that the USA politicians must put aside their partisan views.
2. What about the USA economy, high US unemployment and the FED?
Well for years now, the USA FED implied they have everything in hand. The FED solution was simply to do more bailouts, keep interest rates at sub par near zero levels, and to print more money.
I guess one should conclude by the FED's recent silence, that their past plans of spending massive amounts of money did not work.
Convoluted or failed government logic is not limited to the USA politicians only, and frankly, is found everywhere, especially in the highest government leader levels.
Sadly, unless the logic for the needed government solutions improves dramatically, - the problems will never go away and may well get worse. Governments are famous for crisis management, which simply implies a lack of prior judgement or incompetency.
Here are a few more examples.
3. In the Eurozone it was obvious that after years of trying that Greece, was unable to make the required progress (according to the Eurozone lenders) to cut national debt and pay back a portion of their debt.
The solution recently from the leaders was to lend Greece more money and provide more time.
Voila - problem solved according to the Eurozone leaders.
4. In Canada, the federal government and the Bank of Canada have warned Canadians repeatedly that their household debt is far too high (record historic highs) and stated publicly that Canadians should pay down their loans.
So, what action did the bank of Canada take? They lowered interest rates to near zero and kept them there.
What did Canadian households do?
They borrowed and leveraged even more money on speculative bets.
Evidently, the Bank of Canada and the Canadian Federal Government are surprised and do not understand why Canadians are not listening and continue to borrow even more.
Canada needs new fighter jets in their military. A military that has been constantly downsized from more than 250 fighter aircraft to less than fifty.
Canada also has other serious and strategic deficiencies from downsizing in areas such as schooling, healthcare, and policing.
The government plan and a typical solution is to buy 35 ultra-expensive stealth fighters from the USA to protect Canada. Keep in mind Canada could have purchased as many as 200 - 300 new and upgraded F16's and F18's, that might have been a step in the right direction of rebuilding Canada's lost respect and the defense of Canada.
Canada's Federal Government also plans to spend less on hospitals and healthcare, yet Canada's government pensions for politicians are the most lucrative of all Canadian pensions and at record highs.
It is easy to see that Canadian politicians (like many global politicians) are true civil servants and not in it for themselves.
Technical Trend and Cycle Truth
See the charts below.
The SP 500 is oversold. Limited panic selling at this point would be a sign of a short term bottom.
Aggressive and nimble upside thinking traders may soon wish to place a bet when they see a rounding chart bottom, but they should be careful that hey do not get in front of a bearish freight train and use stops.
Equities can stage a rally from support at this current level (SP 500 ~ 1355) if can hold for (tomorrow) Friday, but probabilities of a ST rally increase to very strong chances of a bounce about 30 points lower, near the 1320 level in the SP 500 Index.
The most probable week (time) of a turn up in the month of November, for USA equities is; next week since the USA Thanksgiving and black Friday is traditionally a short-term optimistic seasonal period for US equities.
Any break below the 1300 level in the SP500 would imply very real panic selling and could cause the SP 500 to drop another 50 points quickly to about the 1250 level.
The major trend is down but counter trend rallies are a normal part of all financial markets and expected.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
Monday, November 5, 2012
Mother Nature is Boss
Hello BBTL Blog readership,
The recent destruction imposed by Hurricane Sandy drives
home an importance lesson that also is foundational in understanding how the
financial markets really work.
The vital lesson is that Mother Nature is the true boss and
ruler.
Although man is slowly learning to interact and even monitor
or predict hurricanes and indeed financial trends and cycles, we all need to
realize that the forces of nature
(and cycles) dominate and rule our planet.
Yet, the vast majority of pros, traders, and investors found
on Wall and Bay Street are ignorant, naive, or at least skeptical about the financial role
of nature, despite the obvious past abilities shown by the greatest of
financial teachers such as W.D. Gann and R. N. Elliott.
Men such as Gann, Elliott, Mandelbrot, Leonardo
Fibonacci, and numerous others have repeatedly
taught that natural cycles and patterns repeat over and over again in the
financial markets. In essence, the financial
markets are more about predictable math and the science of cycles, rather than
the impact or economics of man.
Once nature’s role in financial markets is understood, and
the impact of nature in financial trends and cycles, it becomes laughable to
listen to the economists, the pros, media, gurus or financial pundits discuss
and make detailed forecast about countries’, economies, and companies
based solely on factors that have no consideration or reference to natural law and cycles.
The advantages to an elite few who have come to learn about
and respect nature’s financial trends and cycles, are an increased satisfaction and
confidence to trade the trends and cycles that few others will ever spot or understand.
For years now KRTT (the sponsor of this free blog) has been
on the cutting edge and distinctive in putting forward our teachings in the higher value of understanding Nature
Law. This has included limited cycle insights and educational content even here
on the free blog.
KRTT clients once educated, have thus elevated their financial education and thus joined
an elite group of enlightened financial traders whom follow or shadow in the giant
footsteps of Gann, Elliott, KRTT and many others.
By recent example, early last July this blog alone - started
a unique sixteen week countdown to an important cycle top that showed up in the
USA equity indices. No other blog or financial advisory on this
planet that we know of was making a similar cycle forecast so far in advance,
and using exact precalculated cycle dates.
The nature, theory and math calculations involved in those
cycles were taught in detail to paid
KRTT clients whom now have the ability to use the cycle lessons over and over.
We call that a pretty good return on investment education; – especially when it is taught with a wide variety of other financial technical, fundamental and math tools.
We call that a pretty good return on investment education; – especially when it is taught with a wide variety of other financial technical, fundamental and math tools.
Although so far, it appears the bearish USA cycle top
forecast was right on the money, it
is still too soon to suggest a full blown down trend is visibly intact.
However, assuming KRTT and this blog are again proven correct (KRTT has made
numerous other spot on forecasts) in this particular cycle forecast; the bear
trend is secretly just now getting underway.
Time will tell. As
always KRTT teaches – be prepared to change your mind. Even dominant and large cycle interaction can
have man-made upsets and inversions that distort them.
What else is new?
Well, in the short term, this is a huge week in global financial markets.
New leaders are being appointed simultaneously both in the
USA (presidential election Tuesday) and in China. Meanwhile in the other financial
giant – the Eurozone, Greece is set to vote Wednesday as to whether or not to
accept the harsh austerity plans being imposed by the Eurozone bankers and
leaders.
Summarizing financially and politically, – and also in view
of the coming USA fiscal cliff in 2013, one must conclude that it is indeed a time to be
ready to become more proactive in virtually every potential global portfolio.
Why? In KRTT’s viewpoint Global financial markets are now potentially
on the cusp of some big coming changes.
By just one example, given the huge political differences between Romney
and Obama, – the USA election result tomorrow will certainly have portfolio
manager’s full attention.
Although one can attempt to logically explain any financial scenario
, the key lesson to remember herein is that Mother Nature told you all of this was
coming – assuming of course you have a firm grasp of cycles and nature’s impact.
For the technical truth - see the charts below.
Chart the trend, spot the trend, and go with it.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
Monday, October 22, 2012
Initial Bear Claws
Hello BBTL Blog Readers,
I remain busy traveling and will keep this update short. I will resume normal postings next week.
Last Friday was the worst sell-off in months, and should not be ignored. After all, a plethora of USA companies have recently reported earnings weakness or warned of lower future revenue expectations.
The obvious broadening USA equity weakness in recent weeks, which has damaged even big names like Google, Fedex, Chipotle, Apple, Caterpillar,GE, McDonald's and more, also comes in precision tandem with my ongoing forecast for the end of the bull market era, and the commencement of a new bear market.
In other words, the decreasing number of bulls have largely been ignoring considerable technical evidence, as well as the slowing global economy which is now impacting USA companies.
Although it is too soon to verify or proclaim the bear market trend as fully in place, the recent lower highs and lower lows increasingly suggest that the equity market is extremely fragile at minimum.
I do not have a great deal of new information to discuss (I have clearly stated why I have been been increasingly bearish for weeks) and thus my advice is to study the charts below and re-read previous blog posts if you need more information.
I remain busy traveling and will keep this update short. I will resume normal postings next week.
Last Friday was the worst sell-off in months, and should not be ignored. After all, a plethora of USA companies have recently reported earnings weakness or warned of lower future revenue expectations.
The obvious broadening USA equity weakness in recent weeks, which has damaged even big names like Google, Fedex, Chipotle, Apple, Caterpillar,GE, McDonald's and more, also comes in precision tandem with my ongoing forecast for the end of the bull market era, and the commencement of a new bear market.
In other words, the decreasing number of bulls have largely been ignoring considerable technical evidence, as well as the slowing global economy which is now impacting USA companies.
Although it is too soon to verify or proclaim the bear market trend as fully in place, the recent lower highs and lower lows increasingly suggest that the equity market is extremely fragile at minimum.
I do not have a great deal of new information to discuss (I have clearly stated why I have been been increasingly bearish for weeks) and thus my advice is to study the charts below and re-read previous blog posts if you need more information.
Subscribe to:
Posts (Atom)