Bull Bear Trend Lines - Financial Analysis of Trends and Cycles

Traders Network

2012-02-22T23:45:00.001-08:00

Hello BBTL readership,

I do not have much to add this evening regarding my general outlook since my recent blog was just two days ago. Essentially nothing has changed.

To fully understand my outlook and forecast for North American stocks and the SP500 Index in particular, please ensure that you go back and re-read the last blog and the charts that came with it.

However, in view of my few blogs recently and as a small added bonus, I am posting my short interview on the Traders Network today as well as four new charts, some of which I used in preparation for the interview today.

Enjoy.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Caution - Dangerous Turns Ahead

2012-02-20T21:31:00.020-08:00

Hello BBTL Blog followers,

My apology for my delay of providing a recent update. I have been extraordinarily busy in a needed KRTT reorganization amidst other duties. Thank you for your patience.

My update tonight is slightly longer than normal, and I attempt to include a few bonuses to thank everyone for their participation and dedication to our BBTL blog.

Why Globally, We Now Live In Dangerous and Troubled Times

We all know about the sub-prime financial debacle that swept the world with destruction. People lost houses, unemployment soared and millions of people lost their jobs. Large corporations, hundreds of banks, government agencies, and even entire countries like Iceland went bankrupt.

Over the months of investigation and idle talk that followed, fingers would be pointed at bankster culprits, but virtually no one was truly or effectively punished according to this newspaper feature (click for link).

In fact, by all accounts very little has changed. Despite outright deception, incompetence, losses in the hundreds of billions or even trillions, amidst suspected negligence, incompetence and even fraud by executives, financial companies to this day continue the large bonus payouts and executive salaries to the exact same people that created the global meltdown.

Meanwhile the taxpayer continues to pay the bills and suffer the consequences.

It is as if we the people are constantly being used as the scapegoats. Well, "if we didn't create the mess, why are we suffering and paying for it now?"

This exact question was asked in a recent video production on the topic (click video link) of failed leadership.

So whom is really to blame?

"Clearly one thing is true; politicians, bankers and business leaders, and especially those in charge of regulating the financial industry - completely failed in their given duties and roles".

So let's look fundamentally even deeper, and see if we can possibly uncover some of the root causes for this ongoing debacle.

The first problem, is that our politicians and government leaders really know absolutely nothing about managing and supervising money, and perhaps worst of all, politicians have completely ignored the human trait of greed and placed aside civil duty versus their own self-interest.

This was hotly discussed in a recent and angry Euro-zone meeting while discussing further Greece bailouts (click video link).

Also, even after the fact, politicians have remained negligent in their oversight and financial regulation of individuals and corporations, while continuing to do nothing to safeguard the democratic rights of the people whom elected them. Did no politician, other than Ron Paul ask what was the FED was doing with interest rates set so low and for so long?

Ask, whom wouldn't speculate and borrow excessively when rates are so close to zero.

Instead, politicians seem to prefer to appease large corporate interest, ignore conflict of interest rules, bribes and even corruption. So what is going on in government? Government is increasingly being seen as a corrupt friend to big-business, and an oligarchy-like global old boys (and girls) club, whom want to hold on to power at all costs (click video link) and at whatever costs.

So whom really is financially in charge most of the time?

That answer of whom really holds the trump card, when it comes to money and financial policy regulation is clear; - none other than the central bankers. Enter Ben Bernanke and his predecessor Alan Greenspan. These where the two men in suits that engineered ultra-low interest rates, while fooling themselves into thinking their powers were greater than the size of their ego.

These men, and others globally like them, stand at the pinnacle of the banking society, and completely refuse to take any blame for the past financial debacle.

Instead of doing the honorable thing, of falling on their swords or making amends, Bernanke and many central bankers continue to deceive politicians and the democracy about their prolonging ultra-low interest rates in their convoluted attempts to cover up the real truth.

What is this truth and why?

Are the FED they demonstrating and telling us that they can manufacture "perpetual growth" - even when it is not good for society.

Greenspan and Bernanke threw away the past common-sense FED policy of lean against the wind, that worked so well for Mr. Volcker.

But then greed, self-interest, and ego sets in to many so called intellectual humans. We enjoy power it seems.

Which of the FED banker friends does not like cheap money?

Why not usher in a perpetual growth era with ultra low rates that go on and on? Did they ever see the flaw in their plan? Can anything grow in perpetuity?

Did Bernanke and Greenspan (and other central bankers) standing at the pinnacle of their elite banking society, not understand that ultra-low rates would be used to profit excessively and to speculate. Whom do they think they are kidding, when they refuse to accept the blame?

Instead of the central bankers learning from their brightest of the Laissez-Faire economists, Central Bankers in the west evidently have learned nothing. Either that, or it is obvious that they serve themselves first.

Today, their broken and convoluted solution continues to provide even more credit, to those whom mismanaged it, all the while currency evaluations and sovereign ratings remain in a downward spiral (and eventual inflation they engineered looms, or perhaps even a huge currency devaluation lurks) .

Now, central bankers continue to tell us of even more money supply manipulation, further bailouts, massive credit injections, government issued Euro bond plans, and plans to keep interest rates ultra-low until late 2014 all to prevent hundreds of more banks, and even entire sovereign nations from going broke.

Yes, bankers and especially central bankers screwed up big time.

What were they thinking? What are they thinking? These men in suits have huge egos, and feel they must do something to sustain their egos, when doing absolutely nothing is perhaps exactly the correct solution.

But then again, this is Wall Street, Banker and Washington politics at it's very worst. Humans are indeed getting better at screwing up. The sad part, is that we the people at the bottom of the social pyramid always feel the most pain.

This is not fair. This is not government carrying out their duty. This is not democracy. If it continues much longer, something has to break and soon. Look at Greece in flames. The central bankers with their ultra low interest rate torch, lit this too.

Outlook Bonds and Interest Rates

The largest financial asset class in the world - bonds and debentures, which are normally the safest and most secure asset class - has become perhaps the most unstable and riskiest asset class of the planet - thanks to the ongoing convoluted antics of central bankers like Ben Bernanke.

In my personal view, the FED has made an extremely dangerous gambit to suggest that the FED will keep interest rates low for almost three more years (late 2014).

The world of the commercial (think large) bond trader is smarter than Mr. Bernanke might believe. Although rates look apparently stable now, as each day goes by, one of these ultra-large asset managers (example Pimco) could defect to the side of the angry bond vigilantes.

When enough of these global asset managers decide to sell in unison, there will not be enough money - even in the swollen central bank vaults, to halt their possible trigger of a bond market debacle, which may make the sub-prime collapse look pale.

This will only take an obvious international crisis or critically placed monetary domino to fall - to trigger such an event. Even should things go as the central bankers hope, surely they are telling us in such a policy statement, that things are not just bad, - they are really bad.

My long term outlook for bond prices is justifiably outright bearish. Bond prices must peak when interest rates are essentially zero.

I do not expect the central bankers can hold rates low for almost three more years. They have failed to account for a palace revolt amongst the bond traders and owners. If this Bernanke plan does hold true, it would imply we are now likely entering a depression, and things should begin to deteriorate soon.

Equity Outlook

The North American bull market which began in March 2009 is now getting very old and tired.

That stated, we may have a few weeks left in this bull before any final roll-over. After all, consider the zero interest rate moral suasion of Bernanke. However, given that money management trumps profit, caution cannot now be overstated.

In my yearly forecast way back in January, I suggested that March (and potentially early April) would be the critical months to watch. Nothing has changed my view and my ongoing analysis remains focused on watching the immediate weeks ahead for the signs of significant turn down in equity prices.

In the short term, we are now near a potential top in the third of the final fifth wave. As I stated some time ago, the most likely reactionary price in the SP500 Index, for a legitimate CIT would be just above last year's high, at about 1370. In other words, short term traders should keenly watch their trading indicators for a CIT to down (in a likely wave 4) at about the 1375 - 1385 range on the SP500.

However recently, what looked to be outright underpinning of price levels using SP500 future buy programs, cannot be disregarded. This looks as if the FED, the PPT and the power that be are maintaining a calmness (low volatility) to prices, that could become prolonged or extended.

In Elliott Wave terms for stocks, wave three's are the most likely to extend.

As for time targets, our first minor cycle target in late February is later this week. The further we go into March, the more likely a harmonic down CIT becomes.

If I have to pick the future blame or excuse for any sell off, it would currently be Greece.

In summary, we are approaching the time to be cautious and use tighter stops, or else traders and investors will be facing increasingly growing risk.

One last Elliott hint. It is impossible to say for sure that this is a diagonal triangle. Such triangles are most famous in fifth waves. Thus the rudimentary wedge, or better described rising and terminating diagonal is very well placed. The problem is that some of the internal counts so far, look unorthodox.

We will wait and see. Diagonal Triangles when legitimate and on termination, often rapidly move to their origin point. In this case, it would be about last summer's low of about 1100 on the SP500.

Bottom line - for now the chart remains short term bullish, but dangerous and possibly sharp curves may be just ahead. Use trailing stops. See the chart truth below.

Bonus - As an added bonus I have included a chart of one of the cycles (about 300 day) that I recently discussed in a KRTT video production. This is just one of the dozens of cycles I look at. If this cycle becomes dominant, the chart suggests that the Dow Jones should turn down by early March.

Samples of Medium Term KRTT Outlook

Bonds - Ultra Bearish
Gold - Bearish
Most Commodities (Dow Jones UBS) - Negative (moderate bearish)
Canadian Dollar (think commodity currency) Negative to Bearish

The following is the recent interview on the Trader's Network (February 09, 2012) for those that missed it. At present, I plan to be on the show for a brief session on Wednesday, February 22nd, 2012 at 15:05 PM EST, 14:05 PM CST, or 12:05 PM Pacific.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

FED Hooligans

2012-02-05T22:28:00.000-08:00

Hello BBTL Blog Readership,

Once again Helicopter Ben Bernanke and the USA FED are up to their hooligan bankster antics.

This time, better than any past FED rescue plan (such as TARP) or any QE (Quantitative Easing) program, the FED credit window will simply remain fully open with virtual free money (zero to 0.25% target) until about the end of 2014. Yes add it up, that is a near zero interest rate policy for about three more years.

In my view, the recent FED announcement to keep interest rates ultra-low, for essentially three more years is one of the most reckless and daring yet. After all who can predict the USA or global economy for three months let alone three years.

More important, although everyone else seems to have heard of cause and effect, or the law of action - reaction (i.e Newton's third law), Mr. Bernanke seems lackadaisical and prone to believe that his prolonged and unprecedented zero rate policy can do no harm.

We'll have to wait and see, but I for one would prefer that the past boom-bust bubbles of USA led engineered monetary policy which have proven to provide more hazard than value, be better thought out.

Bernanke must believe the benefits of his transparent and open attitude, will dispel interest rate mystery and provide greater economic benefit than hazard. But let's face it. Bernanke is simply ignorant if he truly believes he or the FED can see three economic years into the future.

Before 1994 the US Fed did not even disclose FED Funds Targets (how the FED sets rates) because quite frankly, telegraphing the FED intentions was then believed - it led to speculation.

So now, in a complete opposite and thus highly convoluted policy approach, the FED is essentially deliberately engineering financial market speculation. We have already seen what happened in the last ultra- low (sub-prime) interest rate era that was ushered in by Greenspan.

If Isaac Newton were alive today, he might laugh at Bernanke's FED and suggest to them that action-reaction, or cause and effect are iron laws that will potentially haunt the USA FED for such an ill thought out policy statement.

Yet then again, Bernanke and the FED economists never listened to or studied the highly intellectual Austrian School of Economics (such as Ludwig von Mises) so why would Bernanke or the FED consider Newton.

In short, here we go again with yet another deliberately engineered USA FED monetary bubble. My bet is being waged on Newton's side that Mr. Bernanke and the FED will not be able to keep rates ultra low or near the zero rate for three more years.

Even a potentially worse outcome, and assuming I am proven wrong, if for some reason interest rates do manage to be assuredly manipulated at these ultra-low rates by central banks acting in collusion, it will surely and truly mean - that we are living in a depression and governments and central bankers are simply lying to us.

What This Means To You

Most of you have probably already figured this out, but this recent FED action is very bullish short term for stocks. Bernanke has in essence underpinned both the stock market and inflation short term with such a vast and powerful policy statement. Yes this is even bigger than QE2 IMHO. He is also secretly telegraphing to us that bonds have become the ultimate high risk investment, with little yield and is engineering potential for inflation. The bad news is that he is also surely implying that problems in the Sovereign Debt World have worsened. For now the focus (and market psychology) is on the Eurozone situation, but the USA will soon have to deal with their massive debt dilemma (think after the 2012 election).

Yet I emphasize again, that this monetary bullishness is a short to medium term effect. Longer term, what I stated immediately above applies.

Moreover, longer term near zero rates, essentially provides nearly unlimited and virtually free money to USA banks and financial companies. Also remember that the financial sector of the SP500 stock index is one of the heaviest weighed sectors. Assuming the USA financial stocks begin to rise (after years of poor performance) it will be very difficult for the SP 500 to have large sell-offs shorter term. Citigroup by example, is already up over 20% this year.

Best Financial Action Plan

As always, the smartest and surest way to invest or trade is to be highly cognizant (think active) of the current trend by using charts and applying technical analysis of trends and cycles. See the two charts below for more valuable clues.

For those interested in more of my current financial views, I will be again featured live this week on the Traders Network at 15:05 EST (14:05 Central Time or 12:05 Pacific). I will post the interview here on the blog if there is enough interest. Most of you already know how to tune in live via Internet radio.

Editors note - My apology for no update last week. Google recently changed policies and somehow locked many of us out of our own blogs, if we had multiple accounts. Things should get back to more frequent postings now. Again, blog frequency in 2012 (at least for now) will be directly related to our blog hit-rate, and my available free time. Please cross post or mention this site if you like it and would like to see more posts. Those whom have a desire for our KRTT professional education, consulting and financial services should contact us directly.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Reversal to Down Now Probable

2012-01-19T19:24:00.000-08:00

Hello BBTL Blog followers,

In our last blog post about two weeks ago I was essentially bullish, but also warned of an important coming medium-term cycle around January 18th, 2012 (plus or minus a day).

Well given that we are now "out of time", and given that important cycle perspective has now reached fruition, it is therefore highly likely - solely based on that previous KRTT cycle calculation, that we should reverse trend direction (CIT) to a new short-term down trend.

Although the market has a little room for a few more upside points in the SP 500 tomorrow at the open, based on "price targets" or even simple market geometry such as trendlines, frankly it is important to see the market reverse.

Currently, I place this described scenario as by far the more likely market play, but given the insanely bullish attitudes recently that have managed to shrug-off considerable bad news (especially in Europe) there is a remote possibility of a dragged out or hanging top.

For now, I will simply say that if the later scenario develops (a hanging top), it will do so (using Gann's Natural Law theory) by a minor cycle inversion, which KRTT describes and teaches as a man-made upset. This would also imply a sharper and more sudden drop would build into future market scenarios.

In summary, at least for now, we should plan on a market reversal to down beginning tomorrow. As described above, a text book or classic chart pattern that could also occur is a "key reversal day".

See that chart below with my usual teaching commentary.

Editors note - My normal posting schedule will resume soon. Sadly, I did not post a blog last week as my beloved brother passed away, after prolonged health challenges.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Happy New Year 2012 - Now What

2012-01-04T19:37:00.000-08:00

Hello BBTL Readership,

Happy New Year to one and all for a healthy, happy and prosperous year ahead.

As I am just now getting back into the financial analysis mindset, after a needed rest, I will keep tonight's blog extremely short. See the chart below for my comments and clues as to where the market is headed next.

FYI - I will be interviewed on the Wall Street Traders Network with host Michael Yorba this coming Friday at 3:05 P.M. Eastern Time (2:05 P.M. Central or 12:05 Pacific Time), so feel free to listen in to local radio stations like KFXR (in Dallas where the show is broadcast) or via the Internet. If I get time I will post my segment of the show here later.

I will mainly be discussing my preliminary forecast for 2012, which I will not deliver in full at KRTT until about mid January. My first market insights already strongly suggest that 2012 will look relatively tame until about the 2nd quarter when I expect risk could rise substantially.

As for my first cycle insights into 2012 and what is ahead, some of you may remember that I posted an esoteric Dow Jones chart providing a KRTT proprietary glimpse of the impact of Fibonacci and Mars cycles last July 21, 2011 (click for link).

The above link is the July archive. The actual correct link to the July Mars chart is here (click here).

That cycle CIT as predicted now in hindsight, worked out to be "spot on" for the now famous flash sell-off of 2011.

The reason I bring this to your attention is that in fact another Mars cycle ( of somewhat lesser impact) will soon arrive sometime in the third week of January 2012.

So, for those of you whom have doubted or possibly wondered about the advanced Gann and KRTT theories relating to cycles of astrology ( and astronomy), you have another chance to observe cycles in action.

I will get back to a more normal schedule of blog updates soon. Again, best wishes to one and all for 2012.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Editors note - Unfortunately, a serious O/S computer malfunction occurred over the holidays. Before KRTT had a chance to back-up recent emails etc., the Microsoft O/S restored computer(s) involved, but equally deleted recent November and December emails - written from new correspondents to KRTT. These emails likely related to queries regarding TA courses, financial mentoring, training or coaching, KRTT research and consulting services, or KRTT e-learning products.

Especially, if you are relatively new to corresponding with me or KRTT, and recently wrote emails to us in either November or December; please resubmit your request as I have now lost your email address and thus not able to respond. Please accept my apologies for our IT glitch, but unless you resubmit your request and your email address, I cannot properly respond to you.

Candy Canes from Santa

2011-12-19T23:55:00.000-08:00

Hello BBTL Blog Readership,

I will try and keep this update pertinent, and also answer some of the recent questions posted in comments.

Santa was Delayed En-route

As we can see in hindsight, the latest week was a continuation of the mild sell-off from the previous week, and yes, generally opposite and less than the normal seasonal rally cycle - so often called the Santa Claus Rally.

So was I wrong about the Santa Cycles recently, and has Santa gone missing on Wall Street?

The simple answer is that all seasonal cycles - even including the strongest ones, are dynamic and subject to the minor (Man made) upsets from the dynamic world we live in.

Notice that I say "subject to the minor upsets", because frankly, nature's cycles are far more potent and will endure despite upsets, so thus are still reliable for the keen cycle analyst, - even when they appear to change or mutate.

As the great W.D. Gann taught decades ago that TIME (and not price) is the master control factor in financial markets. This was one of W.D. Gann's most powerful observations and lessons for those that can grasp it. It pertains to Natural Law as Gann called it - and cycles.

Today, similar to Gann, modern savvy cycle analysts (few in number I would add) tend to use the description - that cycles have "inverted" when they do not work out as expected.

When I use the term cycle inversion, even with savvy investors, I normally expect to immediately lose half of the audience I am addressing, largely because they are scared of the unknown and especially words like "cycle inversion".

Many more market participants are simply too shy, or even outright unwilling (closed minds) to dare to believe in financial cycles.

Even I will admit that when you first begin to learn financial cycles, - they may require you to take a leap of faith. But then again, so does all great education and accomplishment.

Perhaps it is easiest, as you begin that leap of faith to remember that cycles are all around you; - virtually everywhere you look.

Yes, you can deny cycles all you want, but that will not make you rich or smart. It is like standing in the dark. So perhaps consider opening your very own cycle laboratory to learn about financial cycles.

Now, let's try again to answer that question - has Santa let us down by not appearing last week?

The correct cycle answer in my view is "no"; - "Santa has not let us down" he is simply delayed.

Think about it. The sun too can disappear (get delayed) behind a cloud - even when it is seasonally expected - but it is still there!

The key is to accurately interpret what is meant when the Sun or any normal cycle disappears from normal sight?

Unfortunately, the topic of a full "cycle inversion explanation" or even my personal market interpretation of what happened cyclically last week, is too timely, too complicated, and frankly beyond the scope of a free blog.

So based on that answer - as you might expect, yes I am still bullish in the short term, and yes, still a believer in the seasonal Santa Claus rally.

In essence, what I am suggesting to you now, is that there is no real evidence on the chart (only the chart displays and tells us the trend truth) of becoming bearish in either the short or medium term.

I could tell you that what happened last week, was merely a short series of knee-jerk emotional reactions to Bernanke or the Euro-zone, but frankly, it would be more accurate to teach you that many "temporary man-made upsets" occurred last week, which now have delayed the natural Santa Claus cycle.

I hope this helps clear up any misunderstanding. Santa's current recent message reads - "delayed en-route".

Santa Candy Canes

Since Christmas is now drawing near, I have posted a small bonus this week of some premium KRTT content regarding chart patterns. I first discovered the power of financial pattern analysis decades ago when I was working as a pro for Dean Witter (later bought by Morgan Stanley).

Just like cycles, patterns are a powerful tool to have in your traders or investors toolkit.

By the way, KRTT does not teach or endorse relying on any one "best system or indicator" but rather, applying an eclectic mix of all of your financial tools and systems.

As this discussion is premium content, I will not go into a lot of teaching detail, but I will say that when I use or teach our KTTT candy-cane pattern (as shown on the chart below) it is similar to teaching left and right translations on a bar chart.

Moreover, candy cane patterns can be combined with other powerful mathematical and statistical technical tools that will give them even more power and accuracy.

For now, I simply suggest that you apply your visual power and intuition when you analyze chart patterns - so that the two candy-cane patterns taught here (bullish or bearish) have new meaning for you.

Our KRTT bullish or bearish candy-cane patterns are particularly timely right now, since it is near Christmas, and moreover, many candy cane patterns have appeared on SP 500 charts recently.

So here is a short test to improve your skill......

If we have been seeing bearish candy canes (the left side is shorter than the right side) on a 60 minute SP 500 chart recently, what action or assumption could we immediately make - if we thought we saw bullish candy canes forming tomorrow morning?

If we were expecting a trend reversal using other tools

In summary, our KRTT candy cane patterns are a wonderful and powerful addition to a trader or investors educational toolkit.

Answers to Recent Questions and Comments

1. ElkoJohn asked about PTI.....

Good question Elko, but explaining PTI is beyond the scope of our free blog. Sorry, for the short answer, but also PTI is a complex statistical tool primarily used in Elliott Wave prediction.

2. Jeff recently asked, was I still bullish and about potential bearish wave three down.....

Well as you can tell from this evening's post Jeff, yes I am still largely bullish.

I also always reserve the right to change my mind. As I often teach, the financial markets are dynamic and new information comes out daily. For sure the world is now politically and financially unstable. That alone adds considerable risk. This is therefore not a great time for extremely conservative types to take on considerable risk.

When markets are unstable and volatile, they are best suited to short term traders.

Wave three down you or someone else says? Well everyone of course is entitled to their opinion about an individual Elliott Wave count. My experience is that there are very few good EW analysts out there. The wave theory has many nuances. Recently the wave has become more complex and has added time. This too has EW and pattern significance.

In summary, at present I do not agree that a wave three down is underway. BTW- I consider my self an expert wave counter and use other methods to verify counts. Because counts change as the chart and pattern fills in, everyone is subject to errors.

Finally to Jeff and all others, please again note that IF and WHEN my past blog forecast changes substantially, I will do my best to update the blog saying that - I changed my mind.

The fact that I did not respond to your comments recently Jeff has nothing to do with you (BTW - you by commenting are making this blog better) and only implies that my past forecast had not changed substantially.

3. Joe asked about why I now post "weekly".

The full answer is frankly too long for a full and proper response Joe, but this blog is totally free, and as such often works against or conflicts with other KRTT paid products and services.

The answer also gets into complex and messy politics of running a business first - versus ethical and moral free contributions to society for education purposes.

Let me begin by saying, I am obviously available for hire and training at all levels from individuals to corporations, and the people that want to pay for KRTT premium services and courses should write me directly.

I do mainly agree with you thoughts about possible limits of a once a week blog. It also should be obvious to everyone reading this that my paid KRTT clients and my business must come first.

Let me explain further.

When I first started this blog, frankly I had very high expectations. I expected that due to my premium teaching tips, market accuracy (historically proven over time) and past endorsements and referrals from clients, it would make KRTT's BBTL blog very popular blog.

In hindsight I was wrong and perhaps naive. Frankly, it simply amazes me how many useless pages on the world-wide-web go viral, while excellent educational pages can often go unnoticed.This is also true of blogs.

However, let me guarantee that I am NOT here to post and teach unlimited premium financial educational material at no charge. This blog was also a marketing tool for KRTT to determine if it attracts paid clients. All successful business projects work on win - win situations.

Note that I now earn my living now from financial teaching and education. I am passionate about my personal teaching and education agenda, just as I was passionate when I was younger and taught young fighter pilots to fly high performance aircraft in my first military career.

In my second financial career, I paid and worked hard to gain my own formal financial education, and to get into the financial industry where I worked as a successful pro for over a decade. I like many financial students early in life , learned the hard and expensive way over a lifetime.

Becoming a financial executive or pro however, added passion and sped up my education of financial evolution.

Individuals today have to make tough choices to learn on their own (slow) or to pay for a formal pro or financial teacher for fast tracking their financial education. Most good education cost a lot of money.

Any education is always a risk and takes time. Not everyone learns at the same level or rate. Now with the internet age, far too many expect everything for free including free education. However, most so called teachers on the internet posting blogs are often only truly amateurs, and never worked in their so called specialty.

Learning from the wrong teacher - can teach you a lot of bad habits.

One thing that is a constant with all education, is that the sooner that you have a good education, the sooner one can benefit. Some may prefer to take the slower self-taught route but this too has considerable risk.

Beyond my formal financial education, I personally invested in excess of six figures even while working as a financial pro, to fly around the world and take expensive teaching courses from elite others, including market wizards.

Most of these involved technical analysis - one of my life passions. Finally, I went onto develop and study years longer, to gain my own additional insights including proprietary statistical analysis, trading systems and a multitude of advanced cycle and pattern theories.

So yes, I do consider myself an expert as opposed to most blogs written by amateurs. I would like to think that over time, you will agree.

BTW - When I charge money for paid premium KRTT services or mentoring, consulting and financial education, I sleep well at nights knowing that I did my best to deliver beyond expectations, and that the vast majority of customers will take home their money's worth.

But, that does not mean it will be easy. Individual effort is required. Financial analysis is easier to learn than to apply. A good instructor with the proper teaching methods however, can make a big difference.

So that is best short answer that I can currently give to you Joe - about why this blog is weekly. Can you change my mind?

This blog must become either a win-win situation, or inevitably it will one day turn into a a lose-lose situation. For me, to post more often as a free blog (which cost me valuable time), there must be some equal benefit to me.

Many months ago, I asked and appealed several times on this blog for the readership to help me, and to help this site gain more hits and exposure. This for the most part - did NOT happen.

Many prefer to lurk in the shadows on the internet. You Joe are commended for even asking and posting your comments. I would really like more blog participation, (a dynamic classroom) and I am sure others too could contribute from any additional feedback and individual ideas.

So at least for now, it is simply a BBTL blog conundrum, whereby my time is too valuable to post daily or often for such a small readership. Let's hope that changes in the future. It would also be nice for users to become blog followers (sign up) or even like KRTT on facebook.

However, let me tell you that based on our current blog web statistics, that the relatively small number of readers here are indeed loyal. They include foreign governments, USA corporations, and even a few financial experts and institutions as well as individuals interested in learning.

I am certainly open to all ideas and finally reiterate that I have asked for our readers to pass the blog link out to others. This could increase the blog hit rate to the point, I could become interested in posting more frequently.

To date, the only good option that I have heard from others and am considering is to make it a paid financial blog for relatively small fee. This would come with more frequent posting, stock ideas and premium learning content such as the blog educational video I did last August. That video was indeed a big hit.

However, I am not at present making any rash decisions, and even if this paid idea blog did happen one day, it is months away.

One positive step that will be implementing on this blog early in 2012, is the introduction of a MetaStock © sales page.

Purchasing MetaStock via this blog's web link in 2012 (BTW the link will be directly to Equis © Thompson Reuters whom own MetaStock) will have some significant benefits to purchasers, including access to certain premium KRTT services and products.

Again let me know if any of you as readership have positive ideas that can be easily implemented.

If you want premium content and mentoring, and are willing to pay for it, simply email or call me and we can discuss solutions. There are some sound and very real benefits to a more formal education. Check out the client referrals page if you like.

In the meantime, I continue to ask for support to cross-link and recommend our BBTL blog to those whom may be interested. I hope this helps explain my position.

Chart Updates and Patterns

Best regards for a healthy and happy festive season,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Santa Rally To Continue

2011-12-12T19:41:00.000-08:00

Hello BBTL Readership,

As it is the festive season, my time is limited this evening, but I wanted to provide a brief blog update.

In a nutshell, my past blog forecast of a bullish December rally, sometimes referred to as the Santa Claus Rally remains largely intact.

Again I expect a "short term" market high to coincide very close to Christmas on December 25th, 2011. If you have not read over my last or recent blog posts, you may wish to go back and review my financial and cyclical rational.

As you will see from the chart update below, I expect that we are now very close to the termination point of the EW minor four wave down, that I warned about on the sixty minute chart in my last post.

Some of you also wondered about an upward short-term target price for the SP 500. Given that we are running short of time remaining in December, I believe a reasonable target is near the former October 2011 high of about 1293 on the SP500 Index.

As shown on the daily chart update below, this 1293 - 1300 level is a very important resistance level, and the January outlook will become highly dependent, on the late December time and price targets.

Traders should also keep in mind, that the period in late December is highly illiquid, and can become volatile on light volume.

I will update accordingly - if and when my forecast for the short term outlook changes.

Some of you also requested and wanted to listen in, during my live radio interviews on the Wall Street Business Network talk show with host Michael Yorba.

As I happened to do such an interview today, and hinted about my 2012 Financial Outlook briefly, I thought some of you might enjoy listening in. I will discuss the 2012 Outlook in more detail in upcoming blog posts.

Click below to listen .....

There is also an important chart update below with my recent comments. Remember - the charts speak the technical trend and cycles truth.

Best regards for a healthy and happy festive season,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Keynesian Dream

2011-12-05T19:43:00.000-08:00

Hello BBTL Blog readership,

The Keynesian Dream - Ultimate Power Over the World

Last week our financial world saw perhaps the most important and undemocratic liquidity event of the last 25 years.

Many Central Bankers including the European Union, Canada, the USA, Switzerland, the UK, and Japan acted deliberately, simultaneously and mainly unanimously to swap major currencies into USA dollars at essentially zero costs.

Out of their normal stealth mode, it was perhaps also the first blatant glimpse that was undisguised, of just how often that Central Bankers will act in outright collusion with each other, without first considering or asking - "what their population or lawmakers might want".

In essence, countries with weaker, declining or unstable currencies can now print and transfer their vulnerable currency into USA funds via extremely low-cost swaps. In fact, no one even knows how long the swaps will last (perpetuity ?) or what are the real terms and rates?

Is this important? You bet your life and taxpayer dollar it is. What would an expert or even prudent man - say? We are not talking small chump-change here.

Suffice is to say, that if Murray Rothbard (the famous Austrian School Economist and Libertarian) heard the news last week, he might just roll over in his grave.

Rothbard might say; "Well - I told you so. I told you they (Central Bankers using Keynesian Economics as a ruse) had a plan for global power and domination."

For decades, Rothbard warned of the imposed artificial and destructive nature of Central Banks and their leaders on their own economies. Rothbard, as a brilliant economist knew that Keynesian economics were not only flawed, especially when used wrongfully, but were also being used for bank self-interest and profit.

Just for starters, money expansion (beyond small demographic limits) is always inflationary. Moreover, excessive debt or excessive money expansion also will invariably lead to a decline in a sovereign monetary unit, - which eradicates the wealth and sovereignty of that nation.

Remember that just last week, "the excuse" being delivered to we the people for this joint action of Central Bank action is that it was a necessary liquidity step to save Europe, the Euro as currency, and to prevent pandemic economic disaster.

Now less than a week after the event, no one seems intelligent enough, to ask any tough questions. Here are just a few examples below that could expose the risks or ethics of such deal making on a global banker level.

Why should the USA, the UK, or Canada and their populations bail out Europe or Greece?

What is the downside to helping out other countries, that are normally our global competitors?

Is the action fair, or even ethical to the foreign populations that had nothing to do with creating the monetary and economic problems? Does the same democratic populations that were not consulted in advance, also receive highly reduced loan rates, or expansion of their lines of credit at home or from foreign countries from banks ?

Is this action legal, democratic, or "at law"; and was it even approved by government leaders - first ? If so who?

What are the risks to the currencies for supporting such swaps, and what are the inflation or deflationary or other at risk considerations?

Did the USA FED lead and initiate this action? If so, why? Is this another bailout? Why are Americans helping foreign interests that are clearly competitors?

So before you forget what recently happened, stop and realize that no electoral or democratic vote in the USA, or in any country that participated in the recent joint Central Bank action, was ever needed for this deliberate action. The Central Bankers just approved it on their own, and by collusion with each other, thus making it even harder to question - after the fact.

In essence whether you like it or not, populations of several other democratic countries have acted and intervened in a massive monetary decision without first approving the action, or even knowing of the consequences, while using their taxpayer sponsored currencies and offering highly favorable loan rates to foreign interest, based not even on political decisions, but rather the authority of their Central Banks. Consider that, the actions of Central Bankers are becoming bolder, more significant, and all the while non-democratic.

Without a doubt, this type of action is the ultimate Central Bank Keynesian Dream. It is good to be monetary King. It is good to be a Central Banker in 2011.

Imagine. Do what ever you want, to whoever you want, without monetary limits, without recourse, without sanction, without approval, and all for your personal plan or banking self-interest - no matter how illogical, convoluted, unfair, or undemocratic.

Then finally realize that, the USA FED took this action without ever being legally audited for decades, and has never been held accountable, - not even accountable to the USA President or accountable to a single US lawmaker.

Yes, it is the Central Bankers Keynesian Dream. I wonder if the Central Bankers have ever heard of Newton's Third Law.

Liquidity Event

I first taught, the impact of liquidity events (such as that above) in a blog and special video that I did last summer. If you are new to this blog or have forgotten those valuable lessons; you can find them here (click).

The Technical Truth

Despite my lack or absence of blog post recently, there was really little need for updates, given that my recent market forecast have materialized and generally been spot on.

Last week by example, everyone should have seen the abrupt change in trend (CIT) to up, that was initiated on an impulse with qualified range expansion (as opposed to mere volatility).

Below, I have posted two chart updates this evening, complete with my usual teaching commentary and current forecast.

Here are a few extras to keep in mind over the balance of December (until I state otherwise).

BTW - I will update as I see the need for additional commentary, or if the markets change dramatically from my past forecast.

1. Yes, I remain bullish for the balance of December for the reasons that I have already posted and again mention in the charts below. The cycle projection I use for December suggest that a high will come very close to Christmas, but currently most likely - just before Christmas.

2. A Christmas high does not imply very much about my 2012 forecast. As example, and as I have pointed out in the daily chart below, there are two very divergent, but currently qualified Elliott Wave counts, that imply two very different possibilities for early 2012. One possibility is bullish, whereas the other is bearish. The chart will need to fill in more during December, before the EW pattern becomes clearer to favor one of these counts.

3. Short term, the market is now getting overbought and thus naturally, we may experience some short term pullbacks before the final Christmas high that I have forecast for weeks. No market goes straight up. The two most probable areas for the next very-short term pullbacks are:

a) near the former October resistance high of about 1293 (price)

b) a minor cycle date - late this week and/or early next week of about December 10, 2011 (time)

4. Remember and learn, that our last forecast CIT happened exactly when time and price acted in harmony. Also as the great W.D. Gann and KRTT both have taught, when time and price act in harmony - (time is the true or master control factor) there is a much greater chance of a CIT.

See the charts below.

Chart the trend, spot the trend and cycle(s), and go with them.

Sincerely,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Time Price Harmony

2011-11-27T19:36:00.000-08:00

Hello BBTL readership,

Over the last five trading sessions global equity markets weakened, and specifically in the USA, equities in the bellwether S&P 500 Index dropped and retraced to the Fibonacci 1158 level or 61.8% level (see chart).

The chart pattern also became a much more common Elliott Wave zig-zag pattern.

If by chance you bought into the decline too early, then you potentially have missed an all important critical lesson taught on this blog, and first taught by the great W.D. Gann suggesting that time (not price) is the master control factor.

This is why our blog is unique in providing valuable cycle dates - well in advance. As you become more confident in applying cycles, you will normally wait for time to run out before entering trades.

Given that we are now sitting exactly on top of past forecast time (cycle of November 24th) and price window (1158 and 61.8% R), and also entering the seasonally bullish December period, it will be of critical importance for the market to turn up this week.

I will likely post more commentary later this week as we see how the planned CIT plays out. For now, I am thus both short term and medium term bullish, based on my past forecast and cycles.

Note that my short term bullishness is an aggressive (and risky) swing trade as the trend has not yet turned up. My bullish forecast of a CIT to up = now, is solely based on the time price harmony and my past forecast cycle work.

More conservative trend traders should wait to see more evidence before they enter long positions. As always, the equity markets are dynamic and new information comes out daily.

Use caution and stops. Always have a plan B and keep an open mind that things may turn out different than what you may have expected. The recent 61.8 % R suggests that the past wave count (Wave 4) may be subject to error.

A 61.8% Fibonacci re-tracement is more typical of a wave two, and other potential wave counts are indeed possible. Despite my caution to be alert, I remain bullish.

Yet given last week's additional weakness to the 61.8% % R level of 1158, although I expect that the low is in, it may take a few more days to become apparent.

See the charts below.

Chart the trend, spot the trend and cycle(s), and go with them.

Sincerely,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Classic Elliott Wave Four Pattern

2011-11-20T14:34:00.000-08:00

Hello BBTL readership,

I am very short on time this weekend, and hence posting in my past short form technical chart format.

After all as I preach and teach, the all important information regarding trends and cycles that are critical to profit and accurate trading or investing, are discovered and learned by using charts first and foremost.

My past bullish comments about the medium term trend being up, all remain true this week. Moreover, the recent shorter term down trend (hidden within the bigger up trend) is classic or textbook four wave.

Notice for instance, the very distinctive price overlap recently in the labelled A and C wave. Also, many typical technical indicators have remained stronger than normal in the recent minor correction.

So far, at least the current C wave low has held very close to the A wave low in a typical Elliott Wave Flat. Although, lower prices could change the pattern to a much more common zigzag, to date this information is indeed a bullish clue.

Last and certainly not least, we are now nearing a bullish seasonal cycle (USA Thanksgiving, Black Friday, and finally Christmas) which represents a time when the social mood becomes more optimistic.

For further information, I strongly endorse closely reading and viewing the attached charts. The daily chart of the SP500 Index remains bullish for investors.

Equally, the shorter time frame or 60 minute chart of the SP500 is best utilized by traders. Traders should note that we are now nearing a trend reversal to up - soon and apply their best trading tools for a long signal.

See the charts below.

Chart the trend, spot the trend and cycle(s), and go with them.

Sincerely,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Chart Update

2011-11-13T16:55:00.000-08:00

Hello BBTL Blog readers,

I have little to add tonight that I have not already stated recently.

However, in view of the higher volatility and panic as a result of the Euro zone events last week, frankly, I was quite surprised to see the bullish weekly close on Friday in indices like the SP 500.

I also noticed last week that a good deal of buying (especially on the weaker days) took place early in the day (in the regular USA day session ), or going into the final hour of trading.

This made me consider that the global central bankers and their appropriate sovereign "plunge protection teams" (PPT) were at work, quelling the considerable panic driven emotions about Euro zone problems.

Clearly, it was also readily apparent in both Greece and Italy, that new puppet-like (friends of the debtors) leaders must be immediately appointed, and ones that will immediately comply to the Euro zone deal makers without asking any questions.

Either way, the market is what it is, and trend remains clearly bullish in the medium term (at least until year end). This is also clearly in line with my past guidance.

Unfortunately, I am quite short on time this evening and consequently, I am updating mainly via the two charts below, where I have added some of my most recent and pertinent comments.

As for cycles dates that I have already previously mentioned on recent charts and posts, I still expect a minor cycle early this week Tuesday (plus or minus one day), followed by another important cycle date on or about the 24th of November.

In the meantime, check out the chart comments below, and follow the trends and cycles for your own personal trading or investing "time horizon".

In summary, my outlook for the final weeks ahead in 2011 remain bullish (medium term outlook).

Chart the trend, spot the trend and cycle(s), and go with them.

Sincerely,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Lest We Forget - N'oublions Pas

2011-11-10T23:28:00.000-08:00

Today is Remembrance Day, Veterans Day, or Armistice.

I believe the world we currently live in, is in great need of reflecting on the ultimate sacrifice our veterans made, and why it is so important to "remember".

If we fail to truly reflect on Remembrance Day, and the world forgets those historical lessons of the past, and the freedoms earned - often with the blood of veterans, then the world is doomed to relearn them.

I will not be posting a blog today in respect of the day's importance, to reflect on all current military members, at home or abroad, and most important in remembrance of - our fallen Veterans.

As a past military member, today, I will remember my old military friends.

I will especially reflect on those whom died in service to their country, while serving in the peacetime of the Cold War era, while flying CF-104's.

Remembrance Day in 2011 also marks the end of an era. In May of this year, the last combat veteran of World War I, died at the age of 110.

It is only fitting, that above all tomorrow, I will particularly be remembering my own Uncle Charles Gray, who perished very near the end of the Great War.

My Uncle Charlie was the "unfortunate" twin brother that never came home, along side of his two other brothers that fought with him, Richard and George.

For all those that never came home.

Lest we forget.......

The links below are some of my personal favorites for suggested viewing on November 11, 2011.

Remembrance Day - Pittance of Time

A Soldier's Cry

Remembrance Day in Canada

Remembrance Day 2011

In The Name Of Freedom

N'oublions Jamais

Eyes Right

Sincerely,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Cents Less

2011-11-09T20:45:00.000-08:00

Hello BBTL readership,

I am keeping this update short and to the point.

My comments serve as my thoughts regarding the senseless and futile ongoing Euro events, and how these day-to-day charades impact stock prices here in North America.

Most of what you are seeing, hearing, and reading regarding the chaos in the Euro zone, is already mainly factored into stock prices. Moreover, equity prices are far more correlated to cycles and natural law (just as W.D. Gann taught a century ago); rather than to any man-made news or global upset.

Although it might seem as if these Euro zone events spell more future chaos and disaster, it would be more logical and productive for us to ask the "bigger and tougher questions" to seek real solutions.

First, we need to consider the root cause, or just how such sovereign debt events began. Then, we must study the possible truer solutions, as opposed to mere debate and more irrelevant political and economic demands, as they are now routinely made.

Moreover, it is logical and understandable that "we the people" ultimately get and deserve, the leaders and the governments, that we put up with and elected.

Worse, the nature of our substantial human indifference, as well as our ignorance, has allowed bad economic situations to now spiral even further out of control.

No one should deny that these "too-much-sovereign debt affairs" and money crises began when the USA FED and the global Central Bankers conspired to make borrowing money far too easy, and too available in their own self interest to ever-expand the money leverage.

Remember, the logic here is very simple. The more a money lender lends, - the more they make and exert control. So yes, there is no denying that the money changers had a significant role to play in all of this.

Perhaps the biggest global phenomena over recent decades, is not how humans conquered outer space, invented computers, iPhones, or technological miracles, or even developed miracle-like solutions to disease. Rather, more pertinent in view of today's ongoing global money crisis, is that our dark human nature for greed and power, truly allowed bankers with clear monopolies to ever-increase money multiples, to ever increase money supply, and to lower interest rates to sub-par levels, all deliberately by inflationary design and deliberately causing a spiral of debt for their self purpose and profit.

Now and after the fact, it appears that our world is truly paying a heavy price for succumbing to the temptation of easy money, and for letting such convoluted theories delivered by Central Bankers, and their excessive leverage monopoly, to overcome common sense economics and natural cycles.

So consider, just how foolish is it, to believe or cling to a theory, that things should improve in Greece or Italy (Italy is considered too big to fail, or to bailout with almost 2 trillion Euros in debt) by simply firing their political leaders (Papandreou and Berlusconi) amidst mounting pressure in the last few days.

For sure, this debt dilemma will still be exactly the same tomorrow and will remain in place after any new leaders are appointed.

Perhaps such demands could be a telling sign of mere frustration, or worse, a potential hidden agenda by the debtors, and selected Euro leader with their powerful banker allies, that in essence do not want to see their power or their money game of ever lending erode or become blamed.

Nonetheless, evidence is mounting that there is now a plan and a desire to put into place - new puppet leaders that will not act or think about better and truer solutions, and will thus do, "as they are told or ordered" by the power seekers and banking hierarchy.

In the end, while watching such chaotic Euro zone events unfold, one must believe that potentially somewhere down the road, a more serious crisis must unfold and should unfold (the collapse), just as it did in the last sub-prime USA crisis.

If and when such a crisis comes about, it must eventually level the economic playing field and reveal how the over-leveraged and out-of-control banking establishment (whom leveraged greed for profit via money supply increases, banking inflation theories and ultra-low rates) and the convoluted money expansion policies delivered via Central Bankers went wrong from the very outset.

Only after substantial new regulatory changes are put into place, which regulate and police the monopolies of bank power, and changes that must lessen economic control by Central Banks, whom control the potent money supply, leverage and interest rates, will a truer and more lasting remedy to the too-much-debt era be found.

Here is one such Bloomberg link relating some of the recent events (click here).

As for the far more important technical trend and cycle reality, most of what I have been stating for weeks now, about the current equity market remains solidly on track.

In a nutshell, in the short term (for traders) a needed correction is now underway, whereby we are now nearing the final stages (EW - Wave C - see chart).

As for longer and medium term thinking investors, for now at least, the more important medium term (MT) trend clearly remains bullish and up in my view.

I fully expect the stock markets will be in brighter lights by Christmas.

See the two charts below with my usual educational mark up comments.

Spot the trend and cycle, and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

The Right Side

2011-11-06T22:18:00.000-08:00

Hello BBTL readership,

Financial markets have recently become highly volatile, distracted, and highly confused by the ongoing Greece and Euro zone crisis.

The current breaking news report tonight (Sunday)which seem to change hourly, is that Prime Minister George Papandreou has now resigned, under the stringent condition that a new coalition government in Greece will pass the Greece bailout deal. So, is this good news for the financial markets?

Well clearly that is what the banks and Euro zone leaders wanted.

My personal beliefs are largely irrelevant, but nonetheless my personal take is that the Euro leaders are not so much worried about losing money on Greece, but rather far more important to them, they do not want other sovereign nations in trouble (Italy, Portugal, Spain etc) "to see bankruptcy as a viable option."

Frankly to date, everyone at the leadership level has been intentionally failing to see that indeed bankruptcy may indeed be a better solution than many think.

This pay back zero option of default, although painful during transition periods for Sovereign nations in the shorter term, would surely leave many of the debtors (mainly European banks) in a state of immediate bankruptcy, and further create, a most massive emergency increasing of money supply, and a potentially a large devaluing of the Euro as the international markets react.

So alas, what should everyone do with their portfolios and investments? Is it time to run for the hills?

Well, the two sides of the bull-bear money spin and propaganda lately, is that the bears are all saying this is going to get a whole lot worse. Bears naturally love to make money fast since corrections and bear markets are invariably faster and stronger thus taking far less time to earn on short sale profits.

Meanwhile, countries like the USA have done absolutely nothing to stop or dissuade large hedge funds from shorting, and past and proven rules to prevent crashes and panics like the "up tic short sale rule were abolished under the greatest of suspicion. So much for the so-called regulators looking out for the small guy.

Meanwhile, on the flip side, the bulls have a great argument now, that October was fantastic, and even with the recent turmoil, the markets held up remarkably well last week.

Assuming you are anywhere from a novice to an intermediate trader, investor, or analyst, one golden trading tip, or point to remember, is where and why you focus your analytical eyes and thinking.

In this discussion, I am really talking about keeping your eyes on the right edge or right side of the chart (for the time frame you trade or invest in).

Expressed differently, the concept herein is simply that the most recent data on the right side of the chart, is indeed the most valid.

Yes, it is never a breeze to keep on the right side of the trend, since markets are dynamic and subject to change.

But in this case, what I am strongly suggesting is that ' at least for now ' the bulls indeed are the most correct to point out that ' recently ' the technical chart of the SP 500 Index and indeed most equity indices have been far more bullish than bearish.'

This implies that the bears need to be more careful than they are prone to be.

Having stated what may seem as the obvious to the experts out there, we also need to acknowledge that the strong gains of October are now undergoing a needed consolidation phase.

Although investors of medium and longer term time frames should remain generally bullish in my view, yet be more selective on their stock picks (as we enter final stages of the two plus year bull market ), the traders or shorter term timers out there, should also be using even more advanced tools such as Elliott Wave, Pattern analysis, statistical analysis, and if possible cycles.

As for the ever popular Elliott Wave count, this is one of those rarer times when two or even three valid wave counts could apply and frankly, the various counts in my view at present, have quite a different short term outlook.

By example my own primary bullish count suggest the near term correction will not be that large, although a wave C (which have known to have bad nature for surprise). On the other hand, my alternative wave count indeed calls for a considerably larger short term downside. By the way, in both cases, after this downside - the bull market continues.

More specifically, my primary wave count as expressed recently, and again in this update, is that we are within a corrective ABC pattern (likely wave four down) of a larger bullish trend up.

Moreover, in the short term, within the ABC count - we are now about to enter the C wave down soon ( certainly by this week - with the most likely day as Tuesday. I am using cycles for many of these calculations about time - the master control factor (W.D. Gann theory).

As for applying more advanced tools such as cycles, we also need to consider that we are on the cusp of yet another cycle by late tomorrow and in a month whereby numerous short cycles clash, implying the volatility ahead will likely remain higher than normal.

Cycles are also subject to man-made upsets (if the news is significant) and thus could become upset by breaking Euro news, especially if it involves shrinking or expanding money supplies (follow the money flow) such as a higher probability of more trouble.

As for another topic on liquidity (Livermore) in last week's FED meeting, the news release was largely a non-event with Ben Bernanke doing more of his typical convoluted Fed-speek, that he and the FED may act further if the need arises.

As usual, tonight I have supplied two SP 500 charts filled with good insights for investors (SP 500 daily) and traders (SP 500 hourly) and my usual chart comments .

In summary, if you wish to be on the right side of the trend, I suggest that you keep your eyes on the ever-changing right edge of the chart, and place less emphasis on what has happened weeks, months, or years ago; - unless of course you happen to be a more advanced cycle analyst.

In this case, the summary and secret is in viewing the daily chart - the right edge of the chart for now at least continues to be quit bullish in the medium term.

Trade the trend, and the right edge, and not what the so called news and media spinsters or gurus say.

Spot the trend and cycle, and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

October Big Gains - Now What

2011-10-30T18:35:00.000-07:00

Hello BBTL Blog readership,

The breaking news early last Thursday regarding the renewed efforts and united front, which was put forward by struggling Euro-zone leaders, to solve and mitigate the ongoing Greece crisis and other European sovereign debt issues was widely globally applauded.

After all, we have seen far too many news announcements previously from the European leadership, that quickly fell apart. The key question now is not what they say, but what they do. So we will have our answers as to the real merit of this deal in the days ahead.

I could go on and on about the convoluted judgment of global leaders that believe bailout after bailout, is the correct approach to the global debt crisis. Yet frankly, I would be wasting my time and yours.

Humans, will often take the easy and sometimes immoral route out of large or political problems, especially when they have a vested self-interest, or see the alternatives as admissions of their guilt or incompetence. If central bankers also did their job properly or logically, they too would have never made it so easy and speculative to borrow at the sub-par near zero interest rates that we have seen.

Your guess is as good as mine, as to whether or not they as leaders and central bankers, will be able to prevent this excessive money leverage house of cards from eventually collapsing.

In the meantime, this ongoing bailout of Greece (slashing the Greece debt to 50% - or in essence declaring a 50% bankruptcy) was also used as the primary justification for the biggest one day equity rally in months and felt as far away as the USA.

Consider the SP 500 Index which rallied 3.4% in a single day on the news. However, I add that a good deal of that one day rally (about 66% of the days' gain) took place in the opening 5 minutes of Wall Street trading, or in essence - more gaps in stock prices moving instantly higher near the open and close.

So what is the real truth?

The key or hidden greatness in using technical analysis (and cycles) however, is not to get caught up in one's personal viewpoint, and to acknowledge up front - that the charts never lie.

Once investors and traders learn how to trade or invest on behalf of the chart trend and cycle (and not a personal view - no matter how qualified) they will do a lot better in the results category.

This important golden nugget discovery or lesson, implies that you must always be proactive in your investment finance approach, and keep an open mind. It also means that over time, you must learn and apply the rules and critical lessons regarding technical analysis, trends, and cycles.

Furthermore, the more you learn and apply technical analysis, and introduce cycles into your intermediate or advanced financial lessons - the more you will eventually learn that the great W.D. Gann was absolutely correct over one hundred years ago when he stated that, - financial markets follow Natural Law (and nature's universal cycles).

As the blog readership probably wondered but should know by my past comments, recent financial forecast and past lessons, I was not all surprised by last weeks up movements and sharp price swings, which I had been warning about.

More importantly, the now huge monthly price gain in USA equities (along with the positive breadth of the market, and the surprise of a potential major positive change in trend in USA financial stocks) during October 2011, has without any doubt - registered one of the biggest monthly gains in years.

So now what?

Well, this blog has been rather unique in our bullish attitude and up forecast, ever since the August lows of summer. We also introduced the potent lesson of Jesse Livermore and how liquidity increases or decreases impact the market.Last week's additional bailout resolution of Greece by example, will indeed involve "money printing" to ensure future liquidity.

So let me reiterate that looking out medium term , I remain bullish and have given numerous past reasons why I am bullish. If you missed the video update I did on the blog a while back, I suggest that it is a good place to start if you are new to this blog.

However, for traders and those with a short-term outlook, I would equally tell and suggest that the North American and global equity markets, including the SP 500 Index are now incredibly overbought and stretched.

Cyclically, I therefore believe in the shorter term (note our early November cycle on the charts) that it will be impossible to get through the early days of November, without some type of correction. At any given point in time, you should always be accessing not just the reward potential, but also the risk.

In this regard, any drop could become sharp (a snap back reaction) and short lived, and further could take the SP down to the 1200 - 1220 level.

As an added bonus and Happy Halloween tomorrow (here in North America), I have also posted one of our KRTT longer term cycle charts, for investors and those looking out to the medium term, or those keen to learn about cycles.

I last posted this same chart February 2011, and many may have overlooked it.

Yet frankly, this same cycle chart (weekly SP 500 - see below) if properly used and applied, called in advance the major turns or pivot points with a good degree of accuracy.

In fairness to our KRTT subscribers, I will not post this cycle chart again for several months. Most of you should be able to judge what it implies for the balance of 2011.

Spot the trend and cycle, and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Caution - Dangerous Curves Ahead

2011-10-25T23:54:00.000-07:00

Hello BBTL Blog Readership,

I am limited in my free time tonight but nonetheless, I wanted to post a very short update that is mainly by way of two charts (see below).

The key to my posting tonight, is in my past forecast regarding October 25, 2011. Yes, as the great W.D. Gann taught, time and cycles (as opposed to price) are the master control factor impacting the financial markets

Yes, in my recent blog posts, I have been discussing the importance of the Oct 25 - 27th, 2011 cycle hot-spot and forecast in advance that this period would generate important CIT's.

In a nutshell, in my personal viewpoint and especially from my KRTT study of cycles of many years, we are therefore entering an extremely important period of time that should ultimately determine, the future direction of the equity markets, potentially for the next several months.

BTW - yes, as some of you wondered, in the end I still remain bullish longer term, just as I have been since the early August panic low, but naturally I must reserve the right to change my mind. After all markets are dynamic and subject to changes.

Therefore tonight, I have posted an important daily chart of the SP 500 Index, that details certain aspects of our important 666 KRTT cycle, as well as some computer generated eight year cycles showing both conventional and inverted cycles.

Please keep in mind, that such cycles are much more complex than most imagine, and even the most dominant and powerful cycles, are nested with other cycles, and also as most unpredictable; can become inverted.

In summary until I get time to post or comment again, I expect that we have now entered a 5 - 10 day period of very high volatility. This means it is not a good time to be an amateur trader (use tight stops).

Ultimately, although we may go slightly higher in the very short term, this cycle should shake out with some kind of eventual correction (no later than late October or very early November at the latest) , that many in err, or after-the-fact, may potentially blame on the ongoing Euro-zone debt crisis.

So. what is the likely risk at present for a possible gain of another 20 - 30 SP 500 points up?

Well, in my view and based on the two KRTT Elliott Wave counts shown in the charts tonight, typically a wave one can easily retrace 61.8% (of the recent advance) going into a wave two bottom.

Even worse, if my secondary EW count proved out as more accurate, then, we could even see a 100% loss or reversal of the recent gain coming off of the October 04, 2011 - 1077 low in the SP 500 Index.

In closing, although I fully agree that the Euro-zone crisis has become much more dangerous and fragile just recently, and that this could lead to some very serious outcomes (and the potential of a very real pullback in the global equity markets), what still matters the most, is the social mood of the financial crowd - and the trend.

Keep your eye on the charts. Spot the trend and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Caution Near Term

2011-10-12T23:34:00.000-07:00

Hello BBTL readership,

This brief update is via a technical 60 minute SP 500 Index chart, with my usual mark up comments, which speak clearly to my current view.

The last post of a bullish key reversal was very timely but now I strongly advise taking a cautious approach. No one knows for sure, as to if a true bottom is really in yet, until we get decidedly past the resistance highs of recent weeks at about 1230.

Marginal new highs are often made as traders RUN STOPS just ahead of a significant reversal and today's late trading day weakness suggests that our previous cycle target is NOW nearly complete after just seven trading sessions of impressive gains over 13% in the SP 500.

Today, the SP 500 Cash Index printed a new intra-day high at the 1220 level, just a mere 10 points shy of my target high at resistance of 1230, suggesting a reversal down should come within the next 48 hours (By Friday).

Although the bulls would like to see this market trade significantly higher shorter term, (which would also tend to confirm the real market bottom is in if we get above the 1250 level on the SP 500) and this more importantly, would confirm that our past BLOG forecast position of another coming bullish leg up was correct, I must add that I have two concerns short term.

My first concern, is that after a sharp run-up as we have just experienced, the elastic nature of the market tends to snap back.

However, another more serious concern shorter term, is the past EXPANDING diagonal triangle of ever-increasing impulses of volatility may not be over just yet. My EW count of a terminating diagonal is less reliable at present which I will not explain.

Last, and adding to that factor, as I stated in the last blog post is my cycle concern of a potential potent cycle hot spot about October 25 - 27, 2011. These larger potent cycles often usher in temporary sharp volatility sessions.

In summary, we are probably nearing the verge of a short-term CIT to down and I recommend being cautious - at least until about October 25, 2011.

Short term traders, may wish to use technical analysis to time a ST bearish swing trade. Trend analysis predicts a ST trend down if the current SP 500 Index breaks 1195 ( a good trailing stop at present).

Longer term, my prediction still remains that another bull leg up is in the making, but until we get above the 1240 - 1250 level on the SP 500 Index, and given the cycles just ahead; - everyone should now expect high volatility is ahead.

The expanding diagonal triangle may not be over and the market geometry and cycles suggest caution is warranted. Trailing stops anyone?

See the chart below.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Bullish Key Reversal

2011-10-04T23:31:00.000-07:00

Hello BBTL blog readership,

I have been very busy lately, hence the fewer blog post over the last two weeks.

Yet today October 04, 2011 is a rather opportune time for an important update on my market outlook, which in a nutshell remains far more bullish than others. Today's title is after all - "bullish key reversal".

Reviewing back into August 2011, I have consistently taken the market viewpoint, that we are in a correction versus a bear market. I explained my position using seasonal cycles, Elliott Wave, Gann theory and more, in an important blog video update that hopefully you all have seen by now.

Although I never advocate bucking even a corrective down trend for traders, for many medium and longer term oriented investors (your personal time horizon is both unique and critically important to your results) this implies to most longer term oriented folks, that there was little reason to panic as much of the world was suggesting.

In fact while reading the financial or global press over recent weeks, or by listening to the financial media, and following the so-called gurus focused on a global meltdown, one could easily surmise that an Armageddon was imminent.

Equally, by reverse engineering my corrective theory (as opposed to a bear market), one could also surmise and as I further pointed out, that good value and buying opportunities existed in selected stocks and were slowly getting even better as prices decreased.

Based on sector rotation, and the obvious leaders and laggards within sectors, this implies that some stocks have now already bottomed, while others may have a ways to go, before a full-fledged reversal is evident. Also, not all stocks will participate even if there is another bullish leg up.

This ever increasing "value theory" within a correction proved out - again today.

Consider that today, the NYSE had over 1600 - new 52 week lows, and alternatively, fewer than 80 new highs. This represents - a peak bearish ratio reading of about 20:1 - that frankly, I have not seen since about March 2009, when the bull market kicked off - also at panic driven lows.

Yet frankly, today the world has in many ways - already changed for the better. So why all the angst? The bad global news may actually mean "good things are happening". Think about it.

At least we are now globally recognizing the inherent problems with too much debt, both individual, corporate, and sovereign, and the evil of being driven by Central Bank interest rates that were far too low - seducing borrowers into excessive debt. This means the problem has now been largely identified and the "de-leveraging" has begun. Naturally, there are human laggards that have failed to recognize this "free-money" seduction and evil.

Although as evidenced by the current Wall Street protests largely by youth (the positive voice of change), one must admit the world is economically anemic if not systemically diseased.

Although the root causes include oligarchy wealth and power, an ongoing decline in the middle class (more greed), abdication of responsibility, convoluted Central bank policy, rigged government economic and inflation numbers, white-collar crooks and banksters whom are not prosecuted, unfair big-money hand-outs to "select" corporations, and patsy politicians whom serve lower taxes to the rich; I still see absolutely no reason to link this mess, to the now outstanding value being currently offered in many quality equities.

If one is getting poorer or marginalized by the global incompetence and circumstances, this does not mean throwing out the financial baby with the bath water.

After all, investing is best approached logically and intellectually, as opposed to emotionally.

Correlating sovereign debt or a potential default by Greece or anywhere else, to the true value of IBM, Ford, or MacDonalds shares makes for very bad logic. Worse, please tell me where the money will flow when rates rise? When bonds collapse - as they surely will, stocks will become the only play in an otherwise gloomy investment climate.

In the end, financial economics that really work have been taught to us (for the selected learned whom took time to study ) by great historians such as W.D. Gann, R.N. Elliott and Edwards and McGee. For those with more patience than I have, and whom desire less attention to detail and timing even Graham and Dodd have "value driven" validity.

So what will it be? Where do you stand?

Will you let the emotional rants and raves scare you into acting foolishly?

Consider that a lot of shareholders sold their equity shares this morning at record 52 week lows. Are they merely lambs to the slaughter if the market goes up from here, or did they create their own demise?

Ah ha, said Ben Bernanke whom came to the rescue once again late in the day. Remember my past comments about liquidity? Ben is not done yet.

See the following link (click): Bernanke ready to act

How have I done so far? I have heard little feedback and few participate in comments on this blog.

In my previous September 17, 2011 blog - I stated that we may well see the 1076 level in October, 2011.

Today, the key reversal came from a low just one point away from that target at 1075. If we are not at the exact bottom we should be getting "very close". In essence, my target has printed on the tape.

For now at least, given the evidence (some of which is found on the charts below) the short term in my view is decidedly bullish.

However, the ongoing technical damage and dire panic from this ongoing irrational crowd that the financial media seemingly have whipped into a panicked frenzy, might well mean yet another "final retest" of today's minor new low is still needed.

As the little guy is seemingly selling into the panic lately, perhaps the big institutions and hedge funds are looking a little farther into the future. You cannot make money by changing your strategy every two weeks.

This one last low BTW - also happens to relate to my primary Elliott Wave count now being a terminating (unorthodox) diagonal.See the chart.

Finally, as far my individual cycle, Gann, Elliott, and time-price geometry research suggest, this stock market must capitulate into an Armageddon, or alternatively break out into a brand new bull leg up not later than about October 25, 2011.

If the market continues to be weak or decline after that date Armageddon may well arrive.

Expressed differently, this day represents the last of the grand-daddy important longer cycle hot-spots for a termination of a Seasonal summer correction as I advocated from the beginning.

In summary, build your Armageddon bomb shelter, or if you think as I do, perhaps buy some good stocks here; - you be the judge.

The cumulative evidence to date, still suggests to me, that I have seldom (in my lifetime of analysis over three decades) seen a selective buying opportunity in so many stocks - this good. Frankly, a good number of stocks are below their price in the 2008 - 2009 panic lows.

More later this week - see the charts below as the "real truth".

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Position for Profit

2011-09-25T19:33:00.000-07:00

Hello BBTL Blog followers,

I am very short on time tonight and thus my missive is mainly via three charts, that are new to this blog.

I have primarily deviated from my usual detailed SP500 Index posting and analysis to suggest that the broader equity markets globally are now signaling that the time has arrived to position yourself for future profit.

This essentially implies that despite last weeks sell-off, I am still of the opinion that my past analysis strongly suggesting that we are currently in an equity market correction (versus a new bear market) in the SP 500 and other global equity indices remains intact.

I have posted the NYSE composite Index below, because it shows a much broader diversification.

Equally, the Canadian TSX Index would be a more representative index for those interested in commodity stocks (or even commodities).

Last the recent strengthening USA Dollar Index posted below is suggesting why international capital flows (think liquidity) are now favoring the USA at least for the time being, despite the serious USA debt dilemma.

In summary in my view, despite the global economic malaise and investor fear that has spread and what you may read or hear in the media, the charts below (the technical truth) signal and suggest that it is now likely a good time to position capital appropriately for future profit.

Keep in mind (while looking at the NYSE Gann angles shown) that looking out into the future, we are nonetheless entering the final phase of a bull market that will not show the strength of past advances.

Also, assuming this bullish forecast comes true, in every market bottom and correction some stocks and sectors lead while other lag.

Gold, by example lagged the cyclical fall of commodities that was initiated early in 2011. Likewise, there is evidence now that certain USA technology stocks may be one of the sectors that lead and strengthen more rapidly than others.

If for any reason, my forecast that I have been detailing in past video analysis and blog comments for some weeks turns out to be wrong, we should know very soon given the month of October just ahead and the key make or break support levels now near as we test old lows. This is not my primary bullish viewpoint, but is given as a "what if" analysis to show that savvy analyst and traders always must keep an open mind.

The charts always show the trend truth. Natural Law analysis and cycles add considerable foresight to that trend truth. Please note that the extra chart this evening are posted as a bonus and normally reserved for KRTT subscribers.

For more information on coaching or learning KRTT technical analysis, KRTT cycle and natural law theory and our proprietary theories contract KRTTcares@KRTT.com

Chart the trend, spot the trend, and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Liquidity Event

2011-09-17T14:50:00.000-07:00

Hello BBTL Blog readership,

I am very busy during September, and my ability to post updates is somewhat limited. I will do my best to post an update if something significant happens.

Along this "significant event" theme, last week there was indeed one significant financial event.

I wondered how many of you readers spotted it as significant, as it was based on our recent blog teachings from our August video.

Yes indeed (assuming you guessed correctly), it was the event of global central bankers "including the highly potent US FED led by Ben Bernanke" announcing that they would be increasing liquidity to ensure full-blown liquidity is maintained as the European banking crisis continues.

If you do not understand the liquidity aspect, I suggest you go back and watch the video found at: http://www.youtube.com/watch?v=AyjrCsktpgo (click or cut and paste this link into your browser)

Not only was this a highly rare and unusual step by the US FED to join in, and virtually use with unlimited authority the USA taxpayer funded liquidity (and thus liability), to assist their European friends (and USA trade competitors), this was also interpreted by many as a precursor to a coming Greek default, and thus seen as a potential escalation of the Eurozone crisis.

However, assuming you watched our BBTL August blog video, you should know that "added liquidity" is invariably a bullish event particularly at least in the short and medium term.

In this case, Central Bankers are preparing for the worst, and buying themselves time to get through the crisis.

Moreover, foreign Central Banks already had USA swap obligations (a form of debt) and if the FED had of called-in their European outstanding dollar swaps (or raised interest rates) the USA dollar which is now already rising (yes - a bullish trend), could have really magnified European liquidity (a squeeze) causing even more Eurozone repercussions.

As I had advised KRTT clients previously this week, for now at least, this joint FED action also reinforces the weakening Euro currency, and inversely tends to make the US dollar stronger on a global basis than it would otherwise normally be. Yes, this can become a negative for commodities which tend to go opposite the USDX (dollar index) trend.

Essentially as I and others now call the USA Dollar; it is the "best of the worst" .

In short, besides the bullish nature of adding liquidity for stability purposes, increasing the money supply is always inevitably inflationary down the road, so once again, Bernanke and Central Bankers are covertly adding future risk to inflation, which they obviously see as a lesser evil. They also have never failed to bailout their bankster friends, no matter how unfair or incompetent.

Being ex-military, in my personal viewpoint, no matter how you look at it this joint global central bank action, it is somewhat financial akin to NATO ( a large political alliance) declaring war on a small country (for their purpose or reason), but in this case, what bankers would say is an economic crisis and contraction via potential default that was initiated by Greece, and which is now spreading to far more serious countries - like Italy.

Yes, if you stated or concluded that this is more bailouts for incompetent bankers, you may not be far from the truth.

Yes, if you now suggest that money printing Ben Bernanke is covertly participating or now doing a covert QE3 in Europe, you may be stretching it - just a little.

One thing is however certain. The Central bankers spawned the initiation of the global credit crisis.

They, as central bankers are indeed jointly guilty and have never admitted it. It was Central Bankers and particularly the USA FED that fully engineered and encouraged interest rates that were extremely low, over a very prolonged period.

These ultra-low interest rates carried out over such prolonged periods, were the key ingredient that hatched the spiral of speculation, maximum use of leverage, and excessive debt levels that rapidly spread globally. In that regard, easy money may well be declared as the ultimate human addiction which eventually leads to rapid declines in systemic economic health.

It is important to note, that Central bankers held a fiduciary duty of good economic and monetary governance, yet failed miserably in that same duty. Their failure provides beyond any shadow of a doubt, their absence of values and logic and their declining social worth.

Perhaps most surprising of all, is that to this very day, they have constantly abdicated their responsibility while blaming others, and failed to fully and openly discuss their failure and chief responsibility with the public that pays their salaries. After all of this catastrophic mess, the US FED still refuses to be audited and recent court documents in the USA suggest they are intentionally hiding in a cloak of secrecy and shame.

It was these sovereign leadership bankers, that had a plan of insider (bank) expansion that essentially backfired. Now the public taxpayer is paying the price and feeling the economic failure of bad management. Equally, government leaders whom are charged to oversee Central Bankers looked away.

In short, in a near free cost-of-money world era of the past, at continually engineered sub-par interest rates, it quickly escalated into a global rush of money madness to see which government, which bank, which state, which municipality, which corporation, and even which individual could borrow the most and borrow the fastest to ultimately leverage greed, profit, and thus influence and power.

Sadly, what the Central Bankers clearly failed to observe and understand was the nature of greed, how money was viewed in a short-sighted human society, and how the government, corporate or personal managerial inability to be responsible and manage their affairs efficiently - was assumed without regard to risks. We all know where assumptions get us.

Worse, the predisposition to an aristocratic and elite attitude by wealthy economists and bankers, failed to understand the basic science principals of action - reaction. Too much of anything is bad and cycles are not just inevitable - they are established as science fact.

The key now and for the foreseeable future, will to watch the trends and cycles (especially those you must invest or have risk in) closely.

Click on (or better suggested "right click") the charts below for proper viewing.

Chart the trend, spot the trend and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

The following was a previous question I received from poster Jeff about a week ago. Below I am simply re-posting the response as I felt others might find value in viewing it and studying inter-market analysis and money flows.

From Jeff......

So you are more bullish than others. I think WAVE 5 down of WAVE 1 will go below Aug 8, 2011 low before we head up?

James Kelly response said...

Hello Jeff,

There are many additional aspects of inter-market analysis that I have not had time to comment on. As example, recently the USA Dollar (USDX Dollar Index) broke out and UP suggesting the USA currency is initiating a stronger trend UP.

Yes, the USA has mega-debt, but at present and the foreseeable months ahead it will be - "the best of the world's worst currencies".

This implies foreign buying in USA assets (including stocks) will eventually begin as foreigners see large USA corporations as "positive mini-currencies" priced in a rising currency (US dollars).

Secondly, and perhaps an even greater reason, is that the global BOND market is on the cusp of a mega disaster. Bonds have been grossly manipulated for decades and are now painted into a "disaster corner".

The ultra-cheap interest rates of the past, will soon end and ultimately created a fight to see which country (government), which bank, or which person could BORROW the most. This created a MEGA inflation and too-much-debt spiral that is in the process of unwinding and collapsing.

When the bond market realizes the inevitable, (a coming crash of bonds via rising rates and bond-market vigilantes accessing their risk:reward) there will be a RUSH for the global bond market exit. Many will not escape without serious harm.

After the initial phase of interest-rate sensitive exiting begins, managers will become forced to look elsewhere to invest.

Image the world of a FIXED amount of total money supply placed into a set of four jars called bonds and guaranteed investments, stocks, commodities or real estate.

As money leaves one jar it must go into another.

The logical place of exiting fixed income, will be into equities or stocks, particularly stocks in a stable or rising currency. For a time, this could benefit USA stocks, assuming of course the masses can act intelligently and avoid mass panic (putting money int a new fifth jar - under or stuffed into their mattress).

The upside of any market, is never limitless and follows rules of science, just as forecast and taught by W. D. Gann, and I thus must expect an eventual global reckoning will come as cycles of fear and greed have been around since the dawn of civilization.

What we see daily, weekly, and yearly, is merely a cycle.

As for your second question, - my PRIMARY view is indeed BULLISH for now, as above and indicated in the VIDEO recently. The August 8 - 10 low, of about 1101 (SP 500 cash) may well hold, and thus I look for HIGHER highs and higher lows.

Yes, another double bottom or new minor low at about SP 500 level of 1076 is possible, but this would be seen (assuming I do not change views) as a BUYING opportunity. Predicting Elliott Wave years and months in advance, is not something I engage in or subscribe to as the EW counts always CHANGE as patterns evolve.

Man has the ability to influence or mutate these patterns over relatively short periods, but in the end, nature wins.

The best traders and investors must KEEP an open mind, and are always willing to change it when NEW INFORMATION warrants.

I hope this helps.

James Kelly, Editor
PS - Key Cycle date ahead - Sept 27, 2011

PSS - More people posting questions and assisting others with possible answers would make this blog a better place for all to learn.

Stocks are Cheap

2011-09-11T23:37:00.000-07:00

Hello BBTL Blog followers,

It is late Sunday evening after a very touching day of solemn remembrance.

The hearts of the world, are with those in the USA whom still grieve or lost loved ones ten years ago. It was impossible not to shed tears, after numerous beautiful ceremonies over the last few days.

As for our central blog topic of equities and particularly the SP 500 Index, I am updating in very few words tonight and primarily via the two charts as shown below.

Essentially, although high emotion and considerable fear and pessimism continues to grip mainstream America and most of Europe, due to obvious economic woes, it is far more important to watch the charts.

A savvy stock picker will find a good deal of value in this market, in selected individual stocks.

As I also emphasize, stocks are more far attractive than normal at present, given the negative returns (after inflation and currency risk) on fixed income securities in view of ultra-low interest rates.

Finally, for every one's information, I will again be featured as a guest speaker on the Wall Street Business Network broadcast tomorrow - on Monday, September 12, 2011.

Those interested in my current views might wish to tune in and listen at about 6 PM Eastern time, 5 PM Central, or at 3 PM Pacific Coast Time in the USA or Canada.

If you are driving home locally in Dallas at 5 PM (where the show is broadcast live to numerous countries) you might wish to tune into KVCE radio to catch the live show.

For most listeners, I strongly suggest checking out www.yorbamedia.com to listen in live or to retrieve archived shows.

If I get a chance, I will try and post the live broadcast later this week on this blog.

In summary, my missive tonight is that I do not share the very pessimistic views of the bearish crowd at present. Naturally, I must reserve the right to change my mind if the chart and technical indicators change significantly.

In a nutshell, stocks look cheap, and the technical charts and cycles in my view, are far more positive than what the crowd is presently being told, or the markets - acknowledging.

See the charts below.

Chart the trend, spot the trend and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Intelligence Over Emotion

2011-09-05T20:07:00.000-07:00

Hello BBTL Blog readership,

Similar to the stock markets, my lack of blog post(s) over the last few days was a seasonal cycle factor.

Like many in North America, I took a few days off (away from the computer screen) to enjoy the sunshine and our final long-weekend of summer before the busier September ahead sets in.

The SP 500 Index that we discuss on this blog, last week started the week off on a strong rally which I attributed to as - a short lived optimistic Ben Bernanke affect after his Jackson Hole symposium speech.

Then, as the week finished on Friday kicking off a new month, the dismal USA jobs scene and a combination of pre-holiday weekend profit taking, led to a fearful panic driven sell-off that is likely to carry over into this trading week.

After all, in Europe, the acrimonious political debates and mishandling of Sovereign debt situations in countries like Greece, Italy, and Spain rages on. Meanwhile here in North America, it will be more bad (and highly suspicious) news for USA banks and their questionable balance sheets, after the Fannie Mae and Freddie Mac lawsuit.

So what does all of this imply, to a typical trader or investor?

The key analytical and difficult issue with trading indices such as the SP 500, or focusing too much attention on indices of any kind, is that exogenous (outside) events will always be upsetting the short term trends (in any country), because frankly, humans are far too emotional and react to such news.

This is why I suggest analyzing and spending more time on stocks, which are also - less manipulated.

As I also often teach at the outset of courses, learning technical analysis and even some advanced theories such as Cycles, Gann, or Elliott Wave, is far easier than applying such analysis.

Why? Because humans get so caught up with their emotional nature and react in frenzied states of fear and greed rather than applying a little intelligence.

For now, the central bullish theme that I detailed in the video a while back still remains fully intact, but without a doubt, investors around the world will need some reassurances to calm their nerves and get them to realize that the real risks may not be where they are looking - but somewhere else.

As we continue with our liquidity theme (which is one news worthy exception that has very real impact on trend direction) I note that G7 Central Bankers and leaders meet in France this week.

As for more evidence about the short term trend and coming medium term outlook, we will continue to keep an eye on the charts.

See the chart and click on the two links below for more insights.

USA Stocks Are Cheap

G7 Leaders Meet to Consider Liquidity Options

Chart the trend, spot the trend and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Lessons - Bernanke Charms but Liquidity Still Low

2011-08-29T23:52:00.000-07:00

Hello Everyone,

There should be no doubt in any one's mind about the "very bullish nature" of the last three trading days in USA and indeed many global equities" Forensically, the rally began with a sharp inter-day reversal last Thursday.

So, is the sell-off that began in late July over? We need to dig a little deeper and ask what is really going on here.

Is there something perhaps missing? Some are pointing fingers at one man (pictured below), and technically, it is important to note that today's sharp rally was on the second weakest volume day on the NYSE in the last ten days.

As we recently mentioned, liquidity this week (in advance of the holiday) is usually low, but normally returns to much better levels in September. In low liquidity, swings in either direction can be sharper or more exaggerated than normal.

Yet obviously, this three-day rally has at minimum given greater credibility to our KRTT or blog theory that has been espoused here for some weeks (see the video if you missed it), which strongly suggested that the equity market was wrong during the late July and August panic rush to sell, along with the multitude of quick bearish calls telling of an impending doomsday in US stocks (example respected Robert Prechter).

Frankly, as pointed out in the recent video available on this blog, stocks during that seasonal sell-off not only held key technical and support levels on charts, they were also within statistical measures of a "normal correction" and equities as an asset class are the most probable, if not only asset-class worthy of any real merit or consideration.

After all, we are in a prolonged near-zero interest rate environment, which carries huge risks and extremely poor returns in many currencies and especially bonds which are being more manipulated by Central Banks then ever in global history.

Yet today by example, in sharp contrast to recent global panic and bearish equity talk, there was a rash of "good news" simultaneously happening around the globe such as:

1. Europe - Similar to the recent USA Buffet capital injection in bewildered Bank of America, today with the help of vastly rich Qatar, the 2nd and 3rd largest Greek banks merged with new capital and new life. This caused a massive one day rally in Greece equities and banks and suggested the situation was rapidly improving - with big investors looking for undervalued assets.

2. USA Economic Data - The Commerce Department today said USA Consumer Spending for July came in with a + 0.8% increase (mainly autos) beating more than 70% of USA economists projections. This compares to a drop of -0.1 for June and was the best month in five months. This tended to push aside recent data that the consumer was not yet participate in an economic recovery.

3. Brazil - Finance Minister Guido Mantega today stated that thanks to strong revenues, the Brazilian government announced it's annual surplus would be even higher than forecast, and now looked to spend further to stimulate and increase economic productivity in Brazil amidst a dark global uncertainty.

4. USA - Hurricane Irene's wrath although devastating to parts of America, was averted or subdued in the heaviest populated areas and especially in the New York area. The NYSE opened the day for business as usual, after a weekend emergency plan suggested it would be flooded and closed for the day.

5. China - News continues to surface in Asia that The People's Bank of China which sets the value of the Yuan, may be moving closer to allowing the Yuan to appreciate. The Yuan has appreciated about 0.8% against the dollar in August - one of the best rises of the year. A stronger Yuan could bolster Chinese buying power globally (Including USA exports) and signal a needed reform of the Chinese monetary unit. Also today, Citic Securities, China's biggest publicly traded brokerage was cleared by Chinese officials for an initial public offering of about $2 billion USA in Hong Kong suggesting China is further embracing and paving the way to new investment from outside sources.

So what does all of this mean?

Well although today's rally on Wall Street was good news for many, tonight I wish to again focus your attention on three important but former lessons that I have taught both to KRTT clients, and also on this blog.

They are:

1. Being proactive over one's investment and trading capital is mandatory. Being passive or adopting a hold long term strategy can lead to disaster. Just as our human life and endeavors are dynamic and ever-changing, so too is the financial market. New information comes out daily and must be factored into the financial market environment that constantly changes and as such, must be watched and assessed.

2. The above stated and even obvious, reading too much into any one day, or even one week can lead to big mistakes. This includes today. Worse, USA bond and stock markets are without a doubt - being manipulated (see the Visible Hand - free for download on this blog). It is impossible to say just how much of this three day reversal and rally was manipulated by the Bernanke and US Treasury Plunge Protection Team. Yet undeniably the FED admits to engineered and deliberate communications or other tactics to influence public expectations and to influence public confidence as one of the most desirable outcomes of such a communication manipulation. This was a front and center topic and key interpretation of Bernanke's speech at the Jackson Hole Global Central Banking Symposium.

3. Clearly liquidity and capital flows (thus monetary policy as opposed to fiscal policy) into and out of financial markets are far more important than most daily news or media events.

4. Without any doubt, to combat the natural superior intellect of the pros and the institutions, whom most average people invest or trade against, - the greatest level-the-playing-field tactic is to increase one's financial education - especially in understanding the emerging science of technical analysis, and understanding natural both cycles and trends which can be mathematically defined. KRTT teaches such important educational courses at all levels for both individuals, executives and managers.

Summary

Although the global news is nice to know, as this blog has taught recently - the most important financial news item remains over time is watching the FED (or watching liquidity), and thus more specifically, what came out in the "liquidity news" at the weekend global central bank symposium in Jackson Hole, Wyoming.

After one reviews Bernanke's weekend speech in detail (available below as link) there is little to no doubt about Bernanke and the FED's ongoing passion and desire for more stimulation as needed.

However, Bernanke indirectly alluded that Jackson Hole was neither the forum, timing, nor place for specific details, which needed the joint approval of the FOMC, and implied in typical convoluted Fed-speak, that perhaps some FED news might come out at the upcoming September FOMC meeting.

Perhaps beyond liquidity injections, Bernanke continues to make clear, (see communications policy in the speech) that he fully intends to influence the public perception of the markets, and the economic expectations. Economists are taught to deliberately manipulate the public confidence in the USA's widely adopted version of Keynesian economics - which itself has a multitude of flaws.

This deliberate moral suasion factor of influencing communications - should be obvious to all, especially after Bernanke's unprecedented television appearance last year.

Moral Suasion (influence) and communications policy thus remains a huge tactic (and gambit if it backfires) of the current FED program and will likely be used widely and repeatedly in policy statements, in the absence of more influential and superior FED measures which have now been exhausted.

So, what does and investor or trader do? Well as I have stated here before a time or twenty, - the only thing that matters in generating a profit is to understanding the trend and to spot authentic trend reversals.

In essence, the single most important tool still remains investor knowledge, and specifically in the area of technical analysis skills and cycles as stated above.

Yet, as one graduates to a more sophisticated analysis approach or level, a most pertinent and effective way to gain insights over important liquidity flows is to understand and to watch the FED.

Technical Comments

Assuming the equity markets are being FED or PPT manipulated (as are the bond markets - hint download the Visible Hand document on the blog education page), the three day equity rally should end later this week (as early as tomorrow).

This would create or setup - one last minor leg down before a truer and more potent reversal of the bigger trend up - that should not start later then the middle of September.

Making matters complicated, in the last three days, the Elliott Wave count has all of a sudden become less than perfectly clear.

Today's rally in the best case would be the start of a new leg up (Wave One up), or alternatively in the worst case be interpreted as the near top of a complex Wave Four up - with the Wave Five down still to go.

The former final fifth portion of C wave could have thus mutated.

This could be a failed fifth (highly bullish), but this is a very unorthodox and rare Elliott count. It would equally imply the first leg up of a new bullish leg up (into 2012) is now underway as we mentioned.

For now, unless you are personal friends with Ben or have the Goldman insider view, one will have to wait for the chart to show us "the trend truth".

See the chart below.

Also, I strongly suggest that you view (and thus learn from analyzing) the Bernanke speech at Jackson Hole - complete with some of our KRTT comments at the following link.

Ben Bernanke Speech (with KRTT comments) - click here

Chart the trend, spot the trend and go with it.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Watching the FED

2011-08-25T21:23:00.000-07:00

Hello everyone,

The stock market did as we had previously forecast and turned down today.

Tomorrow and next week, the talk and eyes of the world will become focused in discussion on FED Chairman Bernanke and the multitude of analyst opinions after the annual Jackson Hole, Wyoming Global Central bankers symposium.

Most will be wondering if Helicopter Ben Bernanke has any ammunition left in his FED monetary stimulus program, to prevent or thwart the USA, as the world's largest economy from sinking into a prolonged recession.

After all, the US economic data has been poor recently, and unemployment is stubbornly high, and could worsen if USA corporations and their executives lose confidence and resort to further lay-offs.

Moreover the timing for market uncertainty surrounding the FED, both tomorrow and next week continues our recent teachings about the summer seasonal weakness period and LIQUIDITY which is normally near record summer lows, as traders and money managers try and sneak away for the last few holidays.

Sell orders therefore, will likely be met by very weak bids from smart pros and their savvy clients accumulating near summertime lows.

Therefore, as shown on the chart exhibit this evening, KRTT thus expects a weak downward market bias from now into early September.

If you need more review of what I am now referring to (about Liquidity flows and seasonal weakness), I suggest you go back and again watch the video posted on this blog a few days ago.

Some of you requested or wanted to listen into my live radio interview earlier this week on the Wall Street Business Network talk show with host Michael Yorba being simulcast on Dallas radio station KVCE and several countries.

The interview posted here will therefore allow you to listen in, while studying my public viewpoints on stocks, gold, the FED and interest sensitive bonds which I see as an extremely bad investment (thus making stocks relatively even more attractive).

Click below to listen .....

There is also a chart update below.

Best regards,

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

KRTT Update, Chart and News

2011-08-23T21:43:00.000-07:00

Hello BBTL Readership,

Our update this evening is short, succinct, and to the point.

1. SP 500 - Our BBTL blog calls lately have been spot on. Our current and ongoing financial market forecast scenario was clearly hinted and revealed in detail, in the video posted here last week on this blog. We strongly suggest that if you are new here; go back and watch it.

During the last two days the SP 500 Index has rallied nicely, exactly in line with our previous blog forecast, and in line with our Elliott wave count, and our time and price targets (AKA Natural Law) .

Moreover by now, I am sure everyone here knows about my thoughts about August 25th, 2011 - now just two days away.

I expect the next short term CIT (change in trend) will arrive on that day, but as I discussed in the video, it is a large cycle cluster time target, so best give it at least - "a plus or minus day time window" - on either side of Thursday.

This now suggests the next CIT (obviously to down) could now be expected as early as tomorrow until Friday.

2. Listen In - For anyone interested in listening into the Wall Street Business Network Broadcast, KRTT and I (James Kelly Sr) will be a guest speaker tomorrow on Wednesday, 24, August, 2011 at exactly 15:17 (3:17 PM) Pacific Time or 18:17 (6:17 PM) Eastern Time in Canada and the USA.

The Wall Street Business Network show featuring host Michael Yorba can be listened to live (Simulcast/Streaming broadcast) over the Internet at http://www.Yorbamedia.com or alternatively, assuming you are driving home in your car, you could also listen live in the Texas Dallas area, on KVCE in Dallas (1160 AM radio) at about 5:17 PM local time in Dallas.

3. GOLD - I do not officially cover GOLD on this blog, but I am strongly hinting here today (BIG HINT) that I warned KRTT subscribers about GOLD today. Gold fell about $55 dollars in a single session today or about a 2.8% correction daily.

There are far too many analytical and technical analysis details to discuss or go into detail tonight, but a novice should be able to see the basic risk to reward in gold now strongly favors selling. For those that are more advanced in their technical or financial studies, some of the exact same methods I recently revealed here during my recent video update - will help clarify exactly where I believe - gold now sits.

If the blog gets enough hits and requests to cover gold over the next few days, I may consider going into more detail in a future gold post.

4. Charts and Exhibits - Last but not least, I will finally leave our blog readers tonight with two of our usual BBTL learning charts or graphs as below.

Study the mark up comments or highlighted text for additional learning and clarity.

If you are going to trade against the pros - you better soon learn as much as they know. Longer term survival and ultimate reward in the financial markets comes to those whom are well educated, disciplined, and proactive (with an open mind) to name just a few of the basic prerequisites.

As the great W.D. Gann and the bible also teach; as you sow - so shall you reap.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Minor Update

2011-08-21T23:59:00.000-07:00

Hello BBTL blog readership,

Our update tonight is extremely short, and essentially a short-term chart update, that was one of the actual charts from our KRTT subscriber update this weekend.

The SP 500 15 minute chart as show below, in our view suggests a minor rally early this week - followed by one last down thrust to complete the current C Wave down. This if course assumes our KRTT wave count is accurate.

In a nutshell, KRTT continues to believe (opposite to the bearish crowd and so called negative gurus) that our previous more optimistic and ultimately bullish forecast as described and shown on this blog - in the previous video update posted here - remains valid for an important coming CIT.

Time will tell if we are correct.

Some of you, have asked about the possibility of another QE3 liquidity announcement.

This is a very good and timely question for the entire blog readership to consider.

After my last update describing Jesse Livermore theory on liquidity, as being a prime determinant to market moves, we all should realize that new LIQUIDITY injections are positive for STOCK, BOND and COMMODITY prices, and also drive inflation higher.

My opinion however, is although I believe the FED will act out of desperation (in a convoluted way) and continue their past extra-ordinary loose monetary policies, is that there will NOT be a FED stimulus program named as QE3.

Ben Bernanke is far too smart, political, and savvy. He realized long ago that his QE3 program was extremely controversial - including being very controversial with influential and powerful politicians in Washington such as Ron Paul.

The last thing the FED wants now, is increased government oversight or scrutiny of their policies. They have never been audited, and just look at the what the last US Supreme court order to the FED turned up (trillions of dollars of USA FED loans to offshore central banks, and foreign banks that would NOT benefit America, but rather foreign interest).

Therefore, any NEW monetary stimulus that now comes out of the FED, will likely be far more "stealth or heavily disguised" in traditional convoluted Fed-speak.

This is not to say that another FED stimulus program will not come; just that it will not be named QE3, or announced in highly similar or visible terms.

The KEY EVENT for market LIQUIDITY this coming week for market participants to pay attention to, will be the important annual meeting of Global Central Bankers in Jackson Hole Wyoming. This annual global meeting of central bankers, has been hosted by the Kansas City Reserve Bank since 1978.

This Jackson Hole convention is therefore, the most likely near term date and place, that a new FED stimulus program would be both discussed and announced. We will have to wait until after the meeting for potential stimulus details.

As per last year, China has again refused to attend this important event, as they strongly are not in favor the USA FED actions and their hidden agenda as well as the Bernanke methodology of failing to protect the US monetary unit, and thus secretly and deliberately lowering the USA dollar while creating dangerous inflation.

If you have not already watched our recent important blog video update in our last blog post, it is found here:

http://www.youtube.com/watch?v=AyjrCsktpgo

See the SP 500 chart below.

Spot the trend and cycle and go with them.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Follow The Money Flows & Natural Law

2011-08-18T03:04:00.000-07:00

Hello All,

Special Multimedia Update See the VIDEO LINK to this Blog update as posted below

Why video? The blog is trying this as an experimental method to increase blog hit rate and increase your financial education in a more modern fashion. Naturally, we welcome your feedback.

So What About The Financial Markets ? Follow The Money (Jesse Livermore)

Not entirely surprising especially based on recent global events, recently there has been a great deal of worry, panic, angst and questioning about which way the next market move will be.

A number of you - as our readership, and others have asked or even written to us, and wanted our comment in more detail about our current stock market views.

We thank you for your interest and blog participation which has been on the rise recently.

Although naturally we must keep our best financial educational methods and analysis techniques in house or restricted to KRTT paid customers, we have decided under the special circumstances, to release a public KRTT Video Presentation for our blog viewers.

This video can be easily accessed at the following web link:
http://www.youtube.com/watch?v=AyjrCsktpgo.

When you follow our video link mentioned today (assuming that you are unfamiliar with YouTube) please ensure that you CLICK on High Definition or 720p.

This ensures you will be able to see the charts and detail clearly in the video. The HD button (720p) as well as the optimum full screen viewing is found in the bottom right of the YouTube video controls.

If we get enough requests, we may upload a FULL HD (high definition resolution) in 1080p as time permits. Let us know what you think. Please note, that we cannot respond to KRTT subscription, consulting, or discuss our price list request here on a public blog.

For such specific quotes on KRTT education, product, and consulting information, please write KRTT directly with your correct contact info (name, address, country location, phone email, etc.) to either:
KRTTcares@KRTT.com or Info@KRTT.com

Now back to the topic of the current financial markets, we remain short term bearish until the C Wave completes. We discuss this in the video.

Looking out to the medium and longer term, yes at present at least, we are also a lot more bullish than most analysts and experts. Why? Certain key analysis techniques, cycles, and analysis methodologies that we employ or use - suggest such a strategy.

Again, we discuss some of our KRTT intellectual ideas and methods © in the video update.

For those whom may not be fortunate to understand English, and those from outside North America (we have a considerable number or foreign hits on this blog) we have posted a couple of the key charts from the video - below.

Well needless to say, there are a great deal of bears our there at present, and equally we also respect their views.

Investing and Trading is never 100% and the world and financial markets are subject to change. Perhaps, one of the best tools a trader or investor can maintain is an open mind and being proactive.

As our video today suggests - it is all about following the money trends, applying cycles, and using Natural Law.

Then, one must consider the potential impact (if any) of Man whom likes to interfere with nature and our harmonic universe. Such interference can lead to cycle inversions, or what Elliott often referred to as Elliott extensions, abnormal waves, or failures.

See the blog update VIDEO found at:

http://www.youtube.com/watch?v=AyjrCsktpgo

For those that do not wish to watch the video, and as a courtesy to those whom have difficulty with English, - see the charts below.

Spot the trend and cycle and go with them.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Left Brain Financial Decisions

2011-08-11T00:17:00.000-07:00

Hello BBTL readership friends,

There has been a good deal of angst in the global financial markets recently. This is an obvious fact given the high volatility we see almost daily. Trading and investing in such uncertain times, becomes more difficult for an average investor who relies on calm, stability, and reason.

I wish to also say that I regret that I have not had much time to update the blog, as I feel global financial tensions could be eased by sharing simple truth(s) about how our human nature and how the financial markets really work.

I knew some time ago, that August 2011 was not going to be an easy month, but it is coming truer than even I imagined. Check out the current trauma events from around the world from London England, Italy, to Syria, the USA and even Africa. Yes, it is a time of great unrest.

Tonight, I will share a few of my recent insights, by disclosing some excerpts and charts of the latest KRTT information sent out to my friends and clients.

I would like to begin by strongly suggesting that I am not nearly as scared or pessimistic as the financial herd or crowd is right now.

Nor does that imply I am always right, as I am human too and subject to failure. After all the situation in the USA as the world's largest economy, is indeed serious and should not be trivialized.

Yet as you will see from scrutinizing the charts below, at present I am still of the opinion, that most of what we are currently seeing globally, is quite normal and based more on a healthy cycle cleansing in a world that has been completely manipulated by greed and power seekers.

As a small example, I warned you weeks ago of the harmonic two times Mars cycle on a chart example, just as I warned my actual KRTT clients.

Also, sharing the after-the-fact truth about the Mars cycle event and as I suggested, the exact number of calendar days from the SP 500 record high on October 11, 2007, until the exact start of the panic meltdown on July 22, 2011, was yes - as predicted - exactly 1382.

Some of you should recognize this number as associated with Leonardo de Pisa.

Most of you will certainly not realize that either today and tomorrow (343.5) is also exactly a perfect 0.5 Mars cycle, since the powerful breakout up pivot of our last bullish leg, which began about last September 01, 2010 concurrent when I started this blog on a bullish note.

Nor will you know that on August 25, 2011, now just days away, the Master Time Factors (Gann) of Cycles should trigger even more new beginnings.

You may recall assuming you are old enough that August 25, 1987 was exactly 24 years ago and was the exact high before the 1987 market crash.

Just before that date we saw a remarkable Grand Trine (heliocentric) in fire signs.

Next week, in sharp contrast to a Grand Trine, on about August 15th, 2011 (I put up the chart on the blog previously but will re-post it again tonight) - we will see some of the harshest malefic 90 degree angles in all 2011.

I understand that all of this financial astrology and "cycle basics" may mean little or nothing to many of you. Yet frankly, astrology has been around since the dawn of civilization as a mechanism of timing.

It was the great USA market wizard W.D. Gann and our evolved KRTT teachings here that further should compel you to a study of financial astrology. Better yet, come and talk to KRTT and let KRTT assist you in advancing your financial education in technical analysis, cycles and our harmonic universe.

Last, but not least, on this same Astro-sky chart ( upcoming August 15 next week) keen financial astrologers, will also note the marker of a near stellium beyond the Grand Cross.

In short, my interpretation of our now potent Astro-sky and current August cycles, is that I fully expect the global volatility, aggression, and high emotion to continue a short while longer. September should be far clearer and easier going. For now, panic and the worst case scenario seems largely factored into the market prices of stocks and commodities.

Yet, the financial markets are very dynamic and will change. If you react now and negatively in a panic-like state, will you also equally react once again, when things return to a more normal or optimistic state?

Do not be fooled and thus foiled by your all-too emotional right brain.

By the way - some of you have written to us and wondered about our KRTT track record. We welcome the inquires and would like to provide an appropriate answer.

KRTT does not place our highest corporate priority on a mere track record, as we are financial educators and teachers first.

Each one of you as either blog readers here, or even our KRTT students or trainees has individual talents, characteristics and challenges. As we have seen from our past KRTT clients, their ultimate results vary, despite the fact that they are all taught the same material. This was also true of "the Turtles".

As you may have noticed from our blog title today, some people have more discipline and logic and are left brain dominant. Others are more emotional investors or traders and right brain dominant. Many might think right brain dominant traders would panic easier and be less disciplined having poorer results. That is partially true but it is far more complicated than that.

Right brain dominant people given their higher emotional triggers - can also be more creative and look outside of the box so-to-speak. Just imagine how each of these different traders profiles could vary tremendously.

Now what would happen if I gave these two different types of traders an excellent computer-based mechanical trading system that was proven profitable and told them to use it?

In a nutshell, I could give you all the exact same formula for the RED GREEN buy-sell colored ribbon in MetaStock (middle of the hourly chart) as displayed on the chart posted today, and each of you would deliver different results.

Further, beyond the testimonials posted here and on our website (none of which were paid for or solicited) I simply suggest you follow and carefully read this blog. You will reach your own conclusion over time which we cannot amend or influence, nor would we want to, as you are clearly entitled to your view.

We have further made some noteworthy observations about CITs (change in trend).

We clearly told you at the beginning of the summer of 2011, that this summer season would be a difficult period for most traders and investors. This view came forward by using our assessment and understanding of our interpretation of seasonal cycles, particularly given the known annual cycle of low liquidity during summers (sell in May and go away theory).

The SP 500 Index now in hindsight was being held up at or near highs ( by the USA PPT) while other global indices corrected far more normally. Now, after that unusual summer cycle of propped up markets in the USA - essentially the normal seasonal cycle is taking place all at once in a simple steep corrective pattern which has been caused by man-made cycle intervention, which BTW is also conversely happening in gold which too could begin a steep fall soon.

Finally, we recently on this blog (see link below) showed the 2 x Mars cycle and the 1382 cycle recently to the exact day. These are potent long term cycles over many years. Yet as mentioned, we have called numerous shorter term CITs.

http://3.bp.blogspot.com/-POeGCSUAQYE/TikTs8LuQcI/AAAAAAAAAPc/JrKYsYEYqss/s1600/02_KRTT_BBTL_BLOG_July_21_2011_Dow+Jones+and+Mars.gif

Today - please note again as you observe the charts and read some of the cycle dates clearly marked as above - we have just made another major forecast herein. Right now - we are not following the crowd or living in fear.

Again our KRTT cycle theory tell us what to do using the new science of cycles, simple statistical math, and the new emerging science of Advanced Technical Analysis. You may further observe the chart above with just two of the short SP 500 cycles plotted.

As savvy analysts KRTT must always reserve the right to change our mind. The financial markets are dynamic, and new information comes out every day.

Going beyond the SP 500 Index research routinely covered on this blog, how about testing the record in a couple of stock ideas presented and mentioned here on this blog for all of you to see? Again, how did KRTT do? Check out:

On the Buy Side: Tembec TMB (it more than tripled in a few months when few stocks were moving even 10%). We labelled it in advance the KRTT trade-of-the-year and suggested that it could potentially pay for our annual KRTT subscription fees.

http://bullbeartrendlines.blogspot.com/2010/09/krtt-trade-of-year-for-2010-off-to.html target="_blank"

On the short or Sell Side: what about the Juniper Networks JNPR call KRTT made?

http://bullbeartrendlines.blogspot.com/2011/02/crystal-ball-versus-bernanke.html

Juniper peaked out exactly as we warned on this blog at about $45 in February, and is now trading at $20 today. Not bad ideas and recommendations I would say.

Assuming you just did your own research findings on this blogs record versus others, can you begin to now understand our KRTT intellectual curiosity or a level of frustration regarding the low hit-rate on this BBTL blog over the last year?

Competing blogs with mere emotional rhetoric, terrible records, and which often post misleading financial nonsense or after the fact simple observations can attract 1000's of hits per day? We ask why and what did this blog do wrong?

We naturally ask for and enjoy hearing and reading your feedback good or bad (as long as it is written with a degree of respect and if negative makes recommendation for change).Yet frankly there have been so few posts shared in our BBTL readership we wonder what is up with that?

This is after all - a public blog. If you arrived here a while back and revisit this BBTL blog frequently, perhaps it is time to take ownership of this your blog too and post our comments for others to see.

By the way, for you curious skeptics and pessimists - here is yet another good and current - KRTT BUY recommendation that we have given out to our clients.

One of the best big-board USA plays that we have spotted at current depressed levels is to BUY KODAK (NYSE: EK) in the next few weeks. I say it is undervalued, technically and cyclically attractive.

PS further note our caution for the conservative types. At present this is an aggressive trade or investment recommendation as it is currently a SWING TRADE and the trend is still down.

Disclaimer

As always, do your own due diligence, invest wisely, diversify, and stay within your own risk tolerance. Investing in any and all forms involves some degree of risk.

Our recommendation to buy Kodak herein is based solely on our own proprietary KRTT research.

This research primarily involves cycle and technical analysis solutions that were spotted the cycles in Kodak months ago and were pointed out to clients weeks in advance.

The editor of this blog recently bought shares in Kodak and thus has a vested interest in Kodak which trades millions of shares daily on the NYSE under the symbol EK.

Further, our KRTT observations indicate that Kodak may be subject to stock manipulation by large hedge funds including vast and potentially illegitimate short positions. Poor regulation in the USA freely allows short positions with no uptick rule. Worse there is a poor audit or monitoring system in the total number of outstanding short positions evident in both the USA and Canadian regulatory systems.

Write your congressman or government official and ask that lax, obvious, and seemingly intentional financial oversights as these examples be improved and fixed. Otherwise, you will be watching programs like the one in the link below repeated into the future.

Lessons that are not learned now, will eventually be repeated and thus re-learned the hard way in the future. Follow the link below for more examples:

http://www.cbc.ca/doczone/meltdown/videos.html?ID=1588435215

Spot the trend and cycle and go with them.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Update

2011-08-03T09:51:00.000-07:00

Hello BBTL Blog Readers,

I have three brief announcements today.....

First, at approximately 5:47 until 5:57 PM today (USA Central Time) or alternatively at 15:47 Pacific Time - 18:47 Eastern Time, James Kelly Senior of KRTT, will be featured on the Wall Street Business Network Radio show which is being broadcast live today from Dallas, Texas.

On the talk show today, we plan on briefly explaining KRTT views (after the Washington debt deal debacle) about stocks, gold, and possibly some currencies.

The show will be broadcast live and evidently also archived for a short period at:

www.yorbamedia.com

Some of you may like to listen in. Simply click the link at the appropriate time and click on "listen live".

Secondly, our blog will soon begin featuring MetaStock charts.

A sample is found below. Those of you astute Elliott Wave followers will also note, that our former secondary count is now our primary count.

MetaStock has won too many awards to mention and is used by traders and investors world-wide.

It is the major product of Thompson Reuters – one of the world’s largest financial information corporations.

You can download FREE - either the end of day or real time version via a 30 day free trial version by selecting order now button - from the TOP two boxes on the web link provided below.

Naturally I would suggest that you use your free 30 day evaluation period on the more expensive Real Time Version simply because it has more time period features for savvy traders to try out.

The end of day version is very economical and includes computerized system trading.

Although not everyone has the self-discipline or experience to follow computerized buy and sell signals as do the Market Wizards, virtually every trader or investor can benefit from them even as secondary clues to making financial decisions.

KRTT's term for top-notched trading systems that have proven profitable in the past is MPTS, or mathematically proven trading system.

As for data, Reuters sells real time access for excellent prices based on what you need, and one can easily access end-of-day financial data on stocks, commodities, currencies and derivatives, from Reuters, Yahoo and many other financial portals.

The RT version is best purchased outright but also can be leased past the free 30 days for those whom still wish to evaluate it for another 30 or 60 days etc.

For information and our current special price go to***:

http://go.metastock.com/forms/trial?whc=krtt&pc=eq-krtt

*** As a MetaStock partner, KRTT wil be putting up special links and KRTT free bonus material from time to time on this blog.

Third and last today, for those of you whom may be confused (many are) about the prolonged and bitter political USA debt deal and raised spending limit, I suggest that you read the link below.

http://paul.house.gov/index.php?option=com_content&view=article&id=1898:when-a-cut-is-not-a-cut&catid=62:texas-straight-talk&Itemid=69

Here is the SP 500 Index hourly chart I promised as a sample of what is coming on our blog.

Spot the trend and cycle and go with them.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Deal

2011-07-31T20:02:00.000-07:00

Hello BBTL Blog followers,

It is a holiday long weekend here in Canada, and I am going to make this very short and to the point. As mentioned previously I am in the process of making changes to this blog but this post will follow the old format.

As most of you probably already know, Washington politicians reached a deal today to extend the debt ceiling and avoid default.

The prolonged display of childish partisan politics in Washington which lasted for weeks, in such a serious matter has clearly damaged the USA fiscal and monetary reputation, yet frankly it is too early to quantify how much damage was done and exactly when the fallout will come to roost.

Normally, I never post material on the free blog that is sent out to our regular paid KRTT clients but this one time will make a partial exception.

The following is part of the exact wording and one of the two charts that I sent out early last Friday morning (July 29, 2011) to KRTT subscribers.

Short Morning Update

With so much anxiety in the world over the present USA situation, I wanted to give a brief word of encouragement in a short update this morning; “ and in essence a little hand holding “ to all.

Weeks ago here in STP and even on our free blog, I strongly suggested that despite the bad USA situation, I remained bullish.

In fact at that time, I identified a new Elliott Wave One and Two, in what I saw as a continuing UP trend, and immediately labelled it as our primary KRTT count.

As hinted in last night’s STP, I was also using some statistical analysis, powerful cycles, and other analytical jewels to stay relatively calm and logical in the USA debt storm.

However, it would be foolish if I did not suggest the urgency in having a Plan B - in volatile times like these.

Although looking back it has been a tough two weeks watching politicians in Washington fight like silly kids in such a serious situation, even after this morning’s sell-off the CHARTS STILL remain BROADCASTING a positive outcome.

Good luck to all with their trading and investing.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Biblical Proverbs and Market Maxims

2011-07-21T23:22:00.000-07:00

Hello again BBTL Blog readership,

Changes Coming In The BBTL Blog

No, I have not forgotten this blog as some of you may have thought, but in the end, I was simply forced to rethink our blog strategy and posting style, which clearly was not working as I had hoped.

The maxim that comes to mind is; "always change a losing game."

If your strategy is not working, you cannot expect different results unless you make needed changes.

Some of you may also apply this market maxim to your investing or trading performance, especially if you are not getting the results you had expected.

In a nutshell, expect some BBTL blog format changes - soon.

When that happens (soon) the posts will resume in a more appropriate schedule.

For the record, after the last blog post, only one past BBTL reader cross-posted a blog link as I had repeatedly asked (named as rotrot) to try and increase the hit rate.

Also, no one has put in the effort to sign up for the follower account in months.

So again - expect some blog changes soon. Here is the appropriate proverb.

"As a Man soweth, so also shall he reap."

This simple biblical proverb describes exactly how society works today, why the USA, Greece and other countries have a real debt crisis, and even one's own achievement in life. The proverb also describes how this blog works.

Essentially, assuming you input the correct and appropriate effort for a task at hand, the results and reward should be proportional.

So in essence, the lack of recent postings were somewhat in re-action to what I saw as the lack of willingness or response from our BBTL readers to actively participate. There is no fault or blame placed, simply an observation that something was not working.

Although I have already started in this direction, I thus need a little more time to implement a new plan or blog approach with a new format, which is now being put into action.

It will be different, and yet I think over time, our past readership will still enjoy it. If I am correct it will attract more reader participation and a higher hit rate.

BTW - Rotrot (poster) as a small thank you or token of our appreciation for your willingness and effort to cross post this blog - please send in your real name and email address to krttcares@krtt.com

KRTT will in turn send you a link to one of our premium educational videos about cycles and the proprietary work we do, as a thank you.

If anyone else has cross posted a LINK on BBTL blog's behalf, after our last blog request, and somehow we accidentally missed it, then please send in your email as above and with some form of proof of your posting, and likewise KRTT will send you an educational video link.

This edition of BBTL post has two technical charts, one pertaining to the SP500 Index, and the other chart a Dow Jones 30 Industrial Index cycle perspective. Finally, a future esoteric astro-sky exhibit is posted as below to watch for Gann astro fans.

BTW - KRTT purchased RIMM NASDAQ (Research In Motion) for trading purposes today based on our cycle work. (hint) The next ST cycle in RIMM is about the end of the month of July.

Chart the trend, spot the trend, and go with it.

Send in your questions or post your comments as usual, although frankly there has been a dismal lack of participation in the past.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Money Management Trumps Profit

2011-06-12T18:25:00.000-07:00

Hello BBTL blog readers,

The summer of 2011 will likely be a very difficult time for investors and traders, unless they really know their way around stock charts. In addition, for success you will have to be experienced, disciplined and savvy in applying technical analysis rules.

Furthermore, unless you are willing to risk losing all of your trading or investing capital, you should readily admit up front, that money management rules must always trump a desire for profit.

As we recently alluded in this blog over and over, if you understand and apply Natural Law and cycles, then you should have been prepared for this recent weakness in equities and commodities for some time.

There is also a relatively good money management maxim that states; "if in doubt - get out".

So, if you are confused with the current financial markets, or wondering what to do in your own individual financial case, perhaps it is now a good time to sit out for a few weeks. Go on holidays and take a financial break.

For one, clearly KRTT does not believe that the overall equity weakness will terminate before late July, and frankly that is an optimistic assessment.

That stated, KRTT also believes there are going to be some excellent money-making financial opportunities that show up at deep discounts in the immediate weeks ahead.

The key, will be to be selective. So, another way of looking at the financial markets, is that it is now getting much harder for the financially uneducated or inexperienced to profit.

Yet equity markets can also confuse or foil even the best analysts, portfolio managers and investors. This is especially true when the trend goes opposite in direction, to that which one may have expected.

Now that many investors are used to the down trend established in the SP 500 Index, which is now going into the seventh straight week, how will they react when the market rallies?

So essentially, one of the critical financial tasks, is to determine the key nuances and differences between the real or true trend (often called an impulse in EW lingo) versus the counter trend, which is designed to fool and confound anyone who is less than an expert chart forensic detective.

Perhaps compounding the investment or trading dilemma more than most, is fully understanding your own individual time horizon.

Seldom are two people alike when variables such as risk tolerance and time horizon are discussed. These important money management concepts and decisions, must be handled up front and controlled with the highest degree of discipline and adhering to expert rules.

Hopefully, by this open admission of "the real financial rules" and along the analytical line of forensic analysis, the two chart examples as included in today's blog will help both longer term investors, whom in my view should be applying weekly charts in their analysis, as well as the hourly chart example included which is far better suited for the short-term horizon investor, or trader.

In a nutshell, the SP 500 Index sell-off recently was both expected and forecast. In many ways the recent sell off was rational and logical, yet admittedly, there is never a guarantee of financial logic occurring in the immediate financial future.

Ben Bernanke and the FED, whom have literally owned and controlled the US equity markets for the last two years, are still in my view the biggest wild cards (possible QE3 - positive short term).

Equally over the summer, in the negative surprise news column (long term it would likely be positive) more talk of a USA temporary default (AKA Tim Pawlenty and others) and even higher interest rates could send financial shock waves plunging markets even lower.

http://www.cnbc.com/id/43290858/Republican_Mainstream_Flirts_with_Brief_US_Default

In summary, as we now near a time and price support level in the SP 500, that is also approaching the 200 day moving average, it should thus be no surprise to see an oversold condition start to wain and a support or relief rally set in.

Statistically, after the summer solstice, the final week of June is often very bullish, as the USA (July 04) and Canada (July 01) celebrate the major holiday weekend of the summer.

See the two SP 500 charts included below, with my usual mark-up educational comments.

PS - Again, I will determine the blog posting rate this summer, in accordance with the overall hit activity on this blog. Please feel free to cross link this site. In the meantime, send in your questions or comments, and who knows, - you may even get a surprise answer or response from myself or the community that benefits your own financial future.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Cycle Sell Signal

2011-06-01T21:24:00.000-07:00

Hello BBTL blog readership,

Today, June 01, 2011 was a important long term cycle day. We even alluded to the cycle hot spot on our last blog.

The Great WD Gann and other cycle experts technically should have spotted it, and seen it coming a long time ago, assuming of course that they are following Natural Law theory and apply cycles

As a result for our KRTT analysis, this implies that one should take the sharp plunge on the SP 500 Index today "very seriously".

Many might say it was just a one day anomaly, or primarily due to the weak economic data that made pundits worry today and thus sell. We disagree and believe the natural law timing was impeccable.

Using even basic technical analysis, if a lower low is set over the next few days by taking out the 1295 level on the SP 500, even trend traders will then have a valid sell signal. As we have been implying or saying in several of our last posts, the SP 500 was getting into technical difficulty.

For instance, look how many times the SP 500 failed to hold a key support at the 1334 - 1338 level.

Although there are some other equally important nested long term cycles later this summer - today has been on our KRTT cycle radar for some time and KRTT clients have been shown the calculation.

Also cycle traders note that the turn came exactly on a LUNA new moon date. In essence, a potential alignment of Natural Law even from the Astro-Sky as the great WD Gann also surmised.

In short, there are many forms of Natural Law and once understood, - they all work together in harmony.

Many of the blog readers might remember our KRTT prediction made in the fall of 2010 for a major cycle high in the first quarter of 2011.

Although a reasonable SP 500 peak was made in the middle of February 2011, followed by a March correction, and then followed by a sideways pattern; the SP 500 did manage to make a marginal new high recently in the second quarter.

Meanwhile, other global indices such as the Canadian TSX Index, and global commodities, did reach their peak in the first quarter.

Although no one knows the future with 100% clarity, the lessons asserted herein are that every trader and investor needs to understand natural law (including cycles) and to respect BIG MOVE DAYS and immediately ask what is the significance.

When different trading systems using dissimilar methods all agree, it adds confidence and usually accuracy to our ability to trade and invest - on time.

In my professional view, today was a yet another very clear-cut SELL SIGNAL DAY for swing traders. Swing trading involves more risk than trend trading since the trend is not yet established. Yet, other trading systems and indicators (even on potent weekly charts) flashed sell signals weeks ago. One example was the MACD crossover.

If the SP 500 breaks down further this week, and as soon as it gets below 1295, it will create a lower-low bearish pattern, that should even put savvy trend traders into sell mode.

Chart the trend, spot the trend and go with it. See the two charts below.

We regret the infrequent posting schedule at present. Yet lately we have had so few hits on this BBTL blog I have not had a great incentive to post frequently. (PS - We do not count 25 hits from the same IP address in one day, as unique visitors - although we thank some of you for your loyalty)

If you want blog post more frequently, please tell your friends, your co-workers or peers. There are very few blogs that focus on stock market cycles.

We will post more frequently when the blog hit rate returns. Thank you for your understanding.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Market Rules

2011-05-21T20:46:00.000-07:00

Hello Everyone,

I will try and keep my words brief but also succinct and with your financial educational content foremost in my mind.

This is after all, an important market junction.

By the way, I have not changed my bearish outlook longer term.

In fact if anything, I might suggest that I have become even more bearish in my long-term analysis. That stated, I only trade short and medium term, and frankly, in my viewpoint and teachings it is a key mistake to get too caught up into longer term analysis or the economic numbers.

In a nutshell, the simple way to make money (whether you trade or invest) is by following the present trend, and look to and analyze the immediate future trend.

Yet, because we vary so greatly as humans and individuals in our money psyche, you will have to decide on - the time frame of your personal trading or investment style.

However, for anyone foolish enough, or anyone whom might think this is a new or young bull market that is ripe for easy money, I would say and tell you that you - are outright wrong.

In contrast, I believe that at this stage, this is a very mature bull market cycle that essentially has been kept alive by two words.

In that regard, I would add that this market should be acknowledged as dangerous.

Those two words in my view are "Trust Bernanke". If there was a third word to explain the past and present market over the last two years or so, it would be "stimulus (and near zero interest rates) from government".

More onto our central money-making and learning educational topic via the technical trend topic (I may cover my current fundamental and economic analysis topics in a future blog) of asking now what; - we need to focus our attention onto the charts and some application of the rules.

Recently, the SP500 index which we follow closely on this blog, has been in a range bound market. Another technical word that you might prefer, is that the market is congested and needs to breakout or impulse.

As I always teach, we must place our financial faith (and investment or trading money) in a sound financial education, that emphasizes allowing the trend truth "which is revealed" in the charts using technical analysis.

Once you learn to chart and properly use technical indicators, you will then have to learn to become disciplined, and to have the confidence to apply what you have learned.

One might say that with time - one learns the rules.

Along that line as I usually do on this blog, I have included two detailed SP 500 Index charts this evening. The hourly chart of course, best reveals the shorter term market conditions.

On the other hand, the daily chart is usually the cornerstone or foundational chart of both traders whom use it as a longer time frame backdrop for their short-term trades, as well as investors who look out much longer term.

However in today's blog I wanted also to present some technical and market rules that I think will help and educate many of our readers.

IMPORTANT TECHNICAL RULES THAT NOW APPLY

1. Momentum Precedes Price - Market momentum has clearly been lost lately. As I stated, the SP 500 market last week went no where and closed the week out exactly where it opened last Monday morning. Far worse, the index has made no progress since the February high. After such a strong market up in the last two years - this should act as a clear warning signal.

2. The longer a sideways or flat trend go sideways for (in time) - the more likely it is to reverse. This flat period at major market tops should also be a warning. Often this is called the distribution period where stocks change hands from smart holders to those less sophisticated.

3. Any time you are in the third leg of a pattern in one trend (impulse) direction, you should be on high alert, and ready in your money-management strategy to adopt a new plan. In essence, to be prepared for a change in the trend direction.

You do not have to necessarily be an Elliott Wave guru (understanding all of the nuances of wave five), a fractal analyst, or even an expert pattern analyst to learn and realize that financial markets tend to trend and ultimatley move in three waves. For this lesson and knowledge, you simply have to be observant.

Without further adieu, - here are the two charts of today's blog.

I hope to write more about this nearing inflection point soon.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

It's About Time

2011-05-16T01:34:00.000-07:00

Hello BBTL Blog followers,

It's about TIME

Since the dawn of civilization, Man's curiosity and observations regarding the repition of cycles has slowly increased.

As for uncovering the mystery of cycles in the Financial Markets, there have been a few famous names over the decades, but in my personal expertise and viewpoint, the Great W. D. Gann deserves more credit for exposing cycles than most.

Gann informed Wall Street about 100 years ago that he believed Natural Cycles and Science better explained the gyrations of financial markets.

A short time later, the equally fanous R. N. Elliott saw repeating financial patterns that too were undeniable. Although both of these famous men were and still are known in the financial education circles, very few investors or traders properly employ their potent teachings in their investing and trading.

Perhaps it may not be fully obvious as Gann observed and educated, but if cycles do impact financial markets, nature, society, migration, weather and crop patterns, it should follow that cycles are indeed a UNIFYING or UNIVERSAL phenomena - that will one day be fully understood.

For now, those whom can properly employ financial cycles, math, and science in thier analysis - stand to profit more than most.

Speaking of current financial cycles and our blog study topic herein - the SP - 500 Index; I wrote and described in my last blog about the SEASONAL tendency noticed for a SPRING HIGH and SUMMER LOW in the SP-500 Index.

Specifically, last year, in late April 2010, the SP-500 Index made a very obvious high, folowed by a sell-off into July. The cycle focus of that previous blog was asking the question; - Will this seasonal tendancy of a spring high and summer low prevail again in 2011?

If your likely answer is - yes - the cycle will be repeated, than you should be now looking to see a top outlined in the SP500 Index.

Given the recent SP-500 highs in February, the March sell-off acting as a warning, and another recent mild new high in early May, at least from my viewpoint the SP-500 cycle pattern is setting itself up to follow that same or similar seasonal tendancy in 2011.

In fact, in the weekly chart I provided below, one can easily spot the spring high and summer low pattren in each of the last four years - without excepton. Look carefully.

So again, I focus your attention on the seasonal cycle tendency of the SP-500 Index.

Cycles and the Great W. D. Gann studies, as taught by KRTT, both tell us that the financial markets are about - time.

Gann, Financial Astrology, Emerging Science and Cycles

The personal beliefs and teachings of advanced W. D. Gann Theory strongly suggest Gann's sophisticated perspective on applying Financial Astrology in his work.

Advancing this study even further would likely also include Astronomical cycles etc., and without doubt there are numerous modern-day theories about how the planets may be impacting life on our planet, including migration, the tides, the solar wind, and frankly, even time-space warping first put forward as supposition in 1916 by Einstein and recently proven.

So, moving more towards our financial topic and past the solar wind or tides, we need to ask; could the planets impact Man's social moods or even impact finacial makets causing business or financial cycles as the great W.D. Gann believed?

KRTT teaches this financal astronomy topic, much like using any other financial indicator. At times it can come in very handy in an investor or traders toolbox.

By example, we noted that the SP-500 Index finally sold off sharply today. In that regard, the mood was more negative.

In recent weeks in contrast, it seemed that nothing (including the worst types of financial news including; Japan, bankrupt Greece, Middle East uprisings, high USA unemployment, increasing inflation, and a rapidly declining USA currency) could hold the ever-bullish SP-500 from day after day of holding firm or rallying. Why today?

Today, all of a sudden someting seems to have given way.

Well if the Great W. D. Gann where here to talk to us now, he may comment that today was an extremely rare day in Financial Astrology.

Financial Astrologer's whom were astute should have seen this one coming, but today was a very rare triple conjunction (geocentric) of Jupiter, Venus, and Mercury.

There has also been a LARGE clustering of planets in Aries recently.

We are thus now in the epi-centre of this Astrological hot-spot for about another 7 - 10 days when we will see another rare second triple conjunction before the planets break loose from Aries and begin to slowly spread out.

So, whether you believe in the Seasonal Cycle tendancy written above, Gann Astrology as mentioned here, or even if you are a math wiz and Fibonacci fan and noticed that we just passed day 377 (377 is a Fibi=onacci number) from last years late April SP500 high, the ongoing abilities of science, math and natural phenomena applied to finaqncial charts continue to play out and demonstrate their impact.

As I have stated a hundred times or two on this blog, Bernanke and the FED can manipulate the financial markets and even the economy for a while, but in the end - nature and cycles will prevail.

A financial scientist might say, " for every action there is an equal and opposite reaction".

TREND - KISS - Keep it Simple using Technical Analysis

As always, the easist way to ensure that one make money in their investments, or trading, is to be proactive and closely follow the trend (and watch and react to trend reversals or changes in trend CIT).

Of course, you can still forecast markets in advance (as I do here on the blog) or even become an educated and more advanced fiancial guru, or gutsy risk-taking swing trader (going against the trend assuming your timing of a trend change is perfect), but alas, by following the trend is it is far easier to acheive susscess.

The trend is indeed your friend (or enemy when it goes against you).

Therefore, there is only one simple way to become an expereinced trend follower, and that of course is from applied Technical Analysis.

As I teach at KRTT and also here on our blog (and also as per Tom DeMark strongly suggests), technical analysis is rapidly advancing into an emerging science regarding the math of trends, cycles and patterns, technical indicators and fianlly, mechanical trading signals usually driven via expert systems.

In short, with the advent of modern computers, more and more market wizards are emerging as they learn to spot the esoteric essence about - how financial makets really work.

As always I have included two great technical charts today on the blog below as well as teh Astro-sky chart for today.

The hourly SP500 chart depicts the very short term trend, and frankly, although this very short trend waffled badly today, and is beginning to look as if it might be in trouble; so far, we still need a bearish channel break for more downside evidence.

Equally, the weekly SP500 chart below, which itself depicts a far more powerful long-term trend and cycles, is still up - at least for now.

When the SP500 breaks below a trend channel that has previously held for some time, in simple language, it generates a sell signal or change in trend (CIT).

Chart the trend (in the time horizon you use to trade or invest), spot the trend, and go with it.

See the chart mark-up comments in the charts below for even more learning.

Editors' note....

I express my apologies for a lack of updates with no explanation, but I had urgent family and business matters to attend to.

I expect that I will update the blog again about two - three times per week over the upcoming summer. I continue to monitor the blog hit-rate to eventually decide on how often to update. If you appreciate the financial education that you might receive here, I urge you to tell your friends and cross-link this BBTL blog to your favorite sight.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Negative Divergence Warns

2011-04-10T23:58:00.000-07:00

Hello BBTL Blog readership,

Hello everyone and my apologies go out for my distinct lack of blog postings recently, but as I mentioned in advance, I was exceptionally busy and preoccupied recently on an important project.

Then, after such a prolonged period of hard work and very long hours, I took a needed brief holiday period of time off .

During my recent absence, again, some of you felt compelled to write and complain to me, or whine and pass on sarcastic comments about my absence.

Frankly, as I have already warned before, if this attitude of ignorance (by a small number of people) on a free blog - that I say provides valuable and unique learning material keeps up, I will soon become even more inclined to either shut down the blog, ban such offenders, or perhaps even make it a paid service.

Take heed of this last warning as I do not suffer fools gladly. I will also gladly listen to any properly expressed feedback on this topic.

Switching to what matter here the most - "the equity markets" in the mean time, the SP 500 Index still has been trapped in a SIDEWAYS TRADING PATTERN between the February 18, 2011 high set at 1344, and the subsequent March 16 low of about 100 points lower.

Currently, the near double-top pattern based on last weeks SP 500 high around 1339, easily appears that the USA equity markets have shrugged off all bad news.

This includes significant world events such as Middle East uprisings, events in Japan (a major USA trade partner) and renewed Sovereign defaults in the Euro-zone (Portugal). Perhaps even worse for the living standards in America, is the spiraling USA inflation based solely on the further weakening of the USA dollar Index which just last Friday hit new all time historic lows at about the 75 cent level.

If one considers that the same US Dollar Index, traded at about the 129 price level about ten years ago, it implies that the USA currency has declined almost 42% over the last decade.

Given that the USA FED led by Chairman Ben Bernanke and Alan Greenspan have aided this ongoing decline with their ultra-low or even zero interest rate policy and super-expansion of money supply, it makes one wonder how much longer it will take for an outright revolt and collapse of the USA bond and treasury market - which must ultimately lead to higher interest rates.

Again, I will resume posting normal blog updates very soon as I observe the hit rate begin to rise again.

For now, I have included a recent daily chart update of the SP500 showing some of the basic most KRTT cycles projections, Elliott Wave counts, and time-price projections, which summarily suggest that an important top may come later in April 2011.

One last suggestion for those who are more technical analysis savvy (I have not posted it here) is to go and look at the weekly SP500 chart, and look for the NEGATIVE DIVERGENCE in technical indicators such as the RSI (Relative Strength Index).

Negative divergence is normally observed in advance of corrections and periods of market weakness. More on this later. See the chart below.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Watchful Eye on Cycles

2011-03-13T20:17:00.000-07:00

Hello BBTL Blog readership,

I again apologize for my busy schedule, which has dictated my recent lack of blog postings by necessity. As stated before, this condition is temporary, and I expect to resume normal postings soon.

More important our keen observers in our BBTL cyber-classroom, as for the North American equity markets, and the SP500 Index closely as watched here, my previous forecast made weeks and even months ago is at least for now - looking almost uncanny and highly accurate.

I will not go into those forecast details, since they are posted in abundant detail in the past few blogs, but essentially we used several forms of Natural Law which suggested a possible cyclical peak in the SP500 Index between late February and early March 2011. If you have not read those blogs, may I suggest they are worthwhile read.

So far, and in accordance with that same past explanation and prediction, market factors have progressed much as we had discussed and forecast.

However at least for now, my weekend market analysis on the SP500 (which is summarized on two chart examples below), still suggests that we keep a watchful eye and open mind.

Essentially, the equity market is now within a MAKE OR BREAK harmonic time cycle window. This will end soon.

The first problem noted, is that so far and despite a new more cautious mood in the equity markets - the SP 500 has refused to follow through on any corrections.

In essence, as can be easily noted on the SP500 hourly chart - is a recent double bottom that so far has held.

If we used Elliott Wave patterns, this could be yet another truncated flat correction. Truncated flat corrections are ultimately bullish. Worse, given the large recent number of these patterns, it suggests that someone (the PPT or Bernanke) is possibly preventing a more serious correction. This either way is not a factor - if we can keep an open mind.

The good news for market watchers now, is that another MAJOR SEASONAL CYCLE and a rare Super Moon (another Natural Law factor) are just days away. If the great W. D. Gann were alive to advise and teach us on these complex topics, he might say keep a watchful eye.

In short, we need a little more evidence to verify how the market and the NEXT BIG MOVE will play out.

As for shorter term cycles and more minor trends, breaking down in the SP500 level below 1288, suggest a target of 1272 - 1275. Equally, should the SP500 level fall below the more critical 1272 level, it would suggest a more serious correction of another 30 - 50 SP 500 points.

On the bullish or neutral flip side, if the market holds the approximate 1290 current level on Monday, it suggest a stalled market with a slight upward bias.

All in all, and as clearly depicted on the Advance Decline Line chart below, we are in a congested zone that will soon give way to a far more major trend. Be patient for now and as suggested - use caution.

The current world economic scenario is likely going to take a little longer to clarify. As for other world events, my heart goes out to those in Japan.

At the macro-economic level, the USA historically has enjoyed being the world's largest economy, as well as the world's currency of choice.

However, on the negative side, the USA has become by far the most indebted nation, and worse, with Ben Bernanke's ongoing easy money and near zero interest rate policy, has little or nothing to attract lenders and foreign capital flows.

For decades now, the USA has almost secretly engaged (using this same Central Bank policy) in a slow devaluation of their currency and at present a very clear monetization of debt.This situation is highly dynamic and dangerous from a risk perspective.

At some point - and possibly soon, USA creditors may jointly revolt and force an end to what they see as the unfair Federal Reserve policies, the slow devaluation of the USA currency, the demand for the USA to become fiscally responsible, and end the creation of USA led massive inflation in commodity prices from a constantly falling USA currency.

Although Mr. Bernanke appears calm, confident and in control on a daily basis about his Fed policies, we have already seen how quickly things can change and worsen in the Euro zone countries - when debt becomes a focal point.

In essence, Mr. Bernanke may someday be forced to reconsider his policies. We all should know and realize that the USA stock market has been greatly aided and elevated by a Bernanke near zero interest rate policy. What will happen when that era comes to an end?

See the charts below with my usual mark up comments.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Trend Change is Near

2011-02-27T18:51:00.000-08:00

Hello BBTL blog readership,

My apology for the lack of regular blog updates recently, as I have had very limited free time. I expect this condition will likely prevail into late March 2011. After that time, I hope to resume my more frequent blog postings.

More important, there was not a lot of new financial information to add in respect to the bellwether SP500 Index. Even after this update, you will note that my sell, raise cash, or use tight stops viewpoint remains firmly in place.

As you can also confirm by simply reviewing my recent blog postings, I had been forecasting a change in trend (to down) would occur in the SP500 Index in late February to early March 2011. For now at least, all of that previous forecast seems accurate.

Further, my past SP500 Index forecast was based on a fully disclosed market geometry perspective that I discussed in detail in recent blogs. I also included in the analysis cycles, and other forms of Natural Law such as Elliott Wave.

Many of these financial theorems or financial revelations were first introduced by the Great W.D. Gann over 100 years ago. Sadly, few understood or listened to Gann.

With the advent of modern computers, technical charts and analysis tools - more and more analysts have started to become educated about such cycles, market math and other Natural Law patterns as first introduced by Gann.

In fact, in perhaps the most difficult to learn or esoteric form of financial Natural Law - Astro Finance - also as introduced by Gann, I even wrote about change-in-trends (CIT) as frequently occurring around full or new moons. This was detailed in my recent blog posting of February 06, 2011.

If you go back and check the recent high in the SP500 Index, you will now note that it came exactly on a full moon (February 18, 2011). So now, having possibly grasped that Natural Law is indeed powerful and with last week's sudden sell-off behind us, the key question is; now what?

As I have been attempting to point out for weeks now, in my learned view, the risk factors of the current North American equity markets - far out-weight the reward factors. As I have reiterated a time or three before - capital preservation is the first rule to sound money management.

Although last Friday, stocks rebounded sharply from the week's trading losses, it is without a doubt that the previously over exuberant and overly optimistic bulls have now been issued a warning notice. In a nutshell that advice may be that all trees (and all stock prices) do not grow to heaven.

As also detailed in recent blogs - stock prices have only expanded this far and this fast once before in over a hundred year financial equity history.

As I cited that exuberant condition too led to an eventual dramatic collapse. This is one main reason why this is not a time to be financially complacent.

In late April of 2010, the SP500 had retraced 61.8% (FIB) of the sub-prime crash losses. This dramatic rally of 2009 and 2010 was often called the HOPE RALLY because it was based on a hope that trillions of dollars of global bailouts by governments and central bankers might prevent a depression or very serious recession.

Now, consider that recently the same SP500 Index hit a full 75% retracement of the sub-prime losses.

The obvious primary cause of such a continued phenomenal equity rally - since the sub-prime crash was indeed very real - is not based on real economics, but rather money being forced out of other asset classes and into stocks based on prolonged Central Bank Policy.

If 2009 and 2010 were aptly dubbed the HOPE RALLY, perhaps one should consider that the bar of hope has been raised even higher to now near delusional levels.

If nothing else, traders and even institutional investors should see that abundant change (and near chaos) is all about the globe - and especially in the Middle East. Still, most American economists might say, the single most bullish factor for stocks - Ben Bernanke - and his money printing antics, and ever manipulating FED with their near-zero interest rate policy all remain intact.

But what do knowledgeable others say? Well what happens when things change economically, interest rates go up, and everyone wants to sell their stocks at the same time? There is word for this condition and it is not a nice financial topic to think about.

Not only have I and others repeated numerous warnings about Ben Bernanke and his dangerous sandcastle FED policies, lately, even Federal Reserve Bank of Kansas City president Thomas Hoenig has stepped up his criticism of Bernanke.

Thomas Hoenig has noted that such FED policies are possibly creating excessive inflation in food and commodity prices, and far worse - potentially creating unsustainable and unstable price bubbles in everything from stock prices to agricultural farmland prices.

So here is the only proper or succinct answer to determine what to do next. All financial market dilemmas can be answered by thorough and proper analysis of charts and trends.

The charts below speak far more truth than anything I can write or say here. Recently, in my viewpoint the charts (in line with our previous forecast) have issued a warning signal. Although it is still too early to conclude a new down trend is apparent, the technical aspects of the trend are indeed slowly breaking down.

Sure a short-term rally might happen for a few more days, but based on current evidence found in the charts, at some point soon, it appears that the increasing bearish technical factors of the trend may soon overwhelm the bulls.

Chart the trend, spot the trend and go with it. See the three charts as below.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

The Crystal Ball versus Bernanke Sandcastles

2011-02-13T00:03:00.000-08:00

Hello BBTL blog readership,

In the last update, I discussed how to apply simple market geometry (a form of Natural Law) by using the highly visible pivot-point from the sub-prime panic low on March 6, 2009.

At that crisis low, the date (time) was March 06, 2009 and the SP500 Index bottomed at about the 667 price level.

Then, using this time and price pivot, we derived a new harmonic time and price target to expect a change in trend (CIT) that is immediately ahead of us.

Natural Law Market Geometry

Another key concept beyond fractal geometry is a key concept about W.D. Gann's 45 degree angle (one unit of time equals one unit of price) whereby time and price can harmonically interchange with each other.

When this time-price harmony occurs, and especially when it can also be verified by other cycles or natural law theory, a high probability change-in-trend (CIT) is possible.

Additionally, in this example, we harnessed the power of a basic yearly cycle.

Seasonal cycles as they are also called, are amongst the simplest to understand annual cycles. Nonetheless they are still very powerful. Farmers and the financial commodity market participants were the first to observe, utilize and rely on seasonal cycles in their trading.

In a nutshell, if a key event happened in mid August, it created an anniversary or cycle date the following year in mid August according to seasonal cycles.

So, in the last update I pointed out, that according to a near perfect time-price geometry target using multiples of two, as we approach early March 2011 (an anniversary date of the sub-prime panic low) it provides us an approximate SP 500 Index target of about 1334 (667 times 2 or about two times the crash low).

Equally, and at the same time, we are approaching this two times price level at exactly the two year point. Therefore the multiple of two becomes interchangeable.

Again, if time and price are interchangeable, they must be harmonic and be following a Gann angle of 45 degrees. We can also note that two, is a Fibonacci number, and given the approaching anniversary date - seasonal cycles are also involved.

In that last blog, I further pointed out two slightly different methods of calculating time.

The first was using our standard calendar years of 365 days. Two years from the March 6, 2009 panic low would then work out to a time target of March 5, 2011.

However, I also demonstrated an alternate time system based on a 360 day cycle, which would cause the time target to shift forward by ten days to a target of Feb 23, 2011, assuming one counts both the first and last cycle day.

Although no one has a perfect crystal ball, cycles and Natural Law clues provide us incredible insights and clues into how the financial markets really work.

Elliott Wave Adds Value

As we firmly attest and teach here on this blog - the financial markets work primarily according to Natural Law - exactly as the great W.D. Gann alluded and taught over one years ago. The research work that I have completed over decades, has not only proven that Gann was correct (and obvious financial genius for his era), it has further proven alternative natural laws as viable and valid, beyond those which Gann studied.

As we also have Elliott Wave aficionados visiting this blog, I thought I might briefly introduce how to apply a simple EW pattern as another forensic Natural Law clue, to assist new Elliott Wave students to improve their predictive ability to see market tops ahead.

Remember that many forms of Natural Law are predictive in nature, as we have clearly proven here. This does not necessarily mean that one must use such powers as a swing trader going against trends. Many of you should continue to be trend followers.

I begin by first stating, that Elliott Wave is another form of Natural Law. It involves repeating patterns or cycles. Although many EW teachers make Elliot Wave very complex, the predictive power is normally found in it's simplicity.

This however assumes there is no cycle inversion(s) or Elliott Wave extension(s), which by definition are rare events. At present this is hotly debatable, especially given the tremendous intervention of Central Bankers in recent decades. These as I have pointed out, are Man-made upsets (specifically upset mechanisms) that deliberately interfere with natural cycles.

So, we need to acknowledge and to thus point out or teach, that the classic Elliott Wave patterns leave definitive forensic clues of an impending or imminent top. How?

Some of you already probably know this basic EW theory, as is characterized by the EW 4 wave. But did you also know that W. D. Gann knew of this same four wave clue, even before Elliott?

Essentially, in a prolonged bull run - just before the final peak - there is usually a sharp counter-trend correction down which is called wave four.

The Elliott Four Wave is therefore a warning that should be acknowledged or even feared by all bulls, because frankly, it is the final signal or forensic clue in EW theory that a trend may soon change direction.

Fortunately, there is still a little time left in the primary up trend, as the bulls in their ultimate greed will see this as another opportunity and reliably take the market back up - ONE LAST TIME in what is called the final wave five. There are many clues to spot a terminating and final five wave, but these are best left for another day and topic.

At this terminating point, the former up trend or longer cycle, and thus the buying pressure becomes totally exhausted , and the market capitulates by turning down in a major change in trend.

Although I cannot go into details on individual stocks withing the SP500 Index, I will say or remark that several stocks are now or have already experienced this Elliott Wave Four Down - as a forensic clue of a final top.

This means these stocks are now making what looks to be their last or final fifth wave rally up.

One such stock that has a clearly defined recent wave four down is Juniper Networks or JNPR on the NASDAQ.

See the JNPR daily chart as below. Can you spot how Juniper has a clearly defined wave four down that is now complete. The chart below and this previous wave four down forensic clue, now implies that Juniper Networks is in the final fifth wave rally (also within a larger scale wave five). This implies that Juniper Networks is extremely close to a very important change in trend (CIT) or reversal to a new down trend.

Although most of you probably are not aware of this, besides R. N. Elliott, the great W. D. Gann also realized and recognized the power of this forensic sell-off clue just before the final top rolled over.

Gann called this same Elliott Wave four or last counter-trend - the over-balancing of price.

In summary, we should acknowledge that by applying market geometry and our previously calculated time-price target, we now are very near this potential important and final termination point (assuming no cycle inversion or Elliott Wave extension).

We also should be watching over the next few days to see if we can spot any wave four sell-offs (even in a small or minuette EW pattern) in advance of a final SP 500 top or even in advance of a top in our favorite financial instrument that might closely correlate as we demonstrated with Juniper Networks.

Bernanke Sandcastles - Mission Accomplished - High Inflation

Only a fool would deny that there is a very significant danger in the current USA stock market.
Consider the bellwether SP 500 Index.

The SP500 index consist of large-cap blue-chip USA equities that invariably are mature companies, and as such, are not normally known for their high growth rates.

Yet in the last two year, the average SP500 stock has now returned 50% per year. Expressed slightly differently, the SP500 index has doubled in value in just under two years.

This type of equity rate of return in mature USA companies highly statistically abnormal - if not absurd. It also begs the question - why? How can anyone explain such huge and abnormally high returns in large-cap mature USA equities?

To find another such similar era of highly abnormal USA bull markets returns, Wall Street statisticians will have to look back over 75 years. This statistic alone tells us we are now living in a rarefied equity delusion that will not last. Yes, only once in modern equity history (looking back about 110 years) did such a huge return happen. It was in the 1930's.

Let us consider the previous era that such abnormally bullish stock market performance also took place. Again, it was in the 1930's.

Looking back at that time, it was the onset of the Great Depression and after the famous crash of 1929. Wall Street and America then too attempted to deny or marginalize the economic depression by inflating stocks abnormally after the 1929 crash.

What happened then? Well, after that enormous stock market dead-cat-bounce of the early 1930's, stocks crashed again. The second time, this crash of the 1930's was far worse. People slowly came to realize that the Depression was in fact - real. In the end, it took until the 1950's for stock prices just to even break even.

So, we should all be asking; is this equity market rally real? Or, is it based on something artificial - like a sandcastle - that will soon crumble under new tidal forces.

Mr. Bernanke and his Wall Street and FED friends take credit for this stock rally and also the so-called return to USA economic health. After all, something should have happened as we just witnessed, the greatest expansion of money, corporate bailouts, and global stimulus programs in history. But at what cost?

One might even begin to think that the USA is on the dawn of the greatest economic boom in USA history by such massive USA stock returns. Now that too is an interesting topic.

How can any mature economy like the USA - have the biggest global stock market returns? After all, all around the globe emerging economies and new giants (India, Basil, China etc) are nipping at the USA economic heels.

Even, in the recent political turmoil in Egypt - virtually most global stock indices sold off - some sharply. But not the USA or SP500. Is this just more of Bernanke or PPT manipulation. Or is it irrational exuberance?

Alternatively, one might falsely conclude that the USA housing and sub-prime collapse never really happened.

Mr. Bernanke might have us all believe that it was just sugar-plum fairies dancing in our heads. Yes, according to the breaking news at the FED - the housing and sub-prime crash was just a figment of our imagination.
Mr. Bernanke and his banker (some read this as bankster) friends on Wall Street and at the FED, have obviously prolonged and over-stimulated the USA economy, (and now also the stock market) by quantitative easing, a loose and easy money supply at the FED credit window, and the prolonged near-zero interest rate policy.

Yet frankly, this is an artificial monetary policy and economic situation that must soon change.

No equity bull market can last forever, and stock returns of this nature are artificial. All trees do not grow to heaven as the FED might lead one to believe.

Stocks that go up too much or too fast have a nasty habit of snapping back or clawing back abnormal returns. Are you ready for that?

In a nutshell, highly abnormal monetary policies are similar to sandcastles. They are bound to change and wash away as stronger tides and new forces or new economic dynamics take place.

So let us not all act like delusional fools. Also, we need to ask what are the true costs? Those that could lose the most in the future - will likely be the most naive and the least informed.

For recent Bernanke FED comments click here.

Many Americans might endorse, or even praise Ben Bernanke for his monetary and economic prowess and the many deliberate FED led programs to bail out and stimulate an otherwise fragile USA economic situation.

Yet more truthfully, even a simple minded and basic American student of economics, should being asking many questions and possibly see this as the monetary hoodwinking of America.

At minimum it is totally unfair (it helps some and not others and it mainly helps the rich) and at worst, it it an outright dangerous policy of inflation and a planned devaluation of the currency.

One easy to spot Bernanke monetary flaw, is his outright repeated demand to fight deflation. What is so wrong with cheaper prices at the pumps, the supermarket, for cars or at the mall?

To fight deflation one prints money and deliberately creates inflation by massive monetary injections, programs such as QE2, and an obvious continued and prolonged near-zero interest rate policy.

Yet, Ben Bernanke denies that he or the FED policy (or other Central Bankers with similar policies) are responsible for higher inflation. This is being coy and frankly evading the real truth.

When cornered on this higher inflation topic, Mr. Bernanke immediately implies higher prices are merely a supply-demand economic demand pickup, suggesting his policies are really working.

Yet , how does higher inflation impact the average American?

Also, any armchair economist cannot help but point out that Ben Bernanke and the USA FED are at the same time deliberetaly engineering both higher inflation and a lower USA dollar.

Given that most Americans, if properly educated would want a higher USA dollar (as opposed to a lower dollar) to prevent the erosion of their buying power (and also the lowering of their standard of living) one must ask where does this foolish support for Ben Bernanke comes from?

Although more complex to economically discuss (we'll save it for another day), this could also be construed as Bernanke and the FED are now deliberately engineering the greatest wealth transfer in history (out of lower and middle-class America by a hidden agenda to devalue the USA dollar) while creating inflation that is higher than it otherwise would have been .

Well, I say a very BIG congratulations should now go out to Mr. Bernanke and his Central bank friends!

They have exactly accomplished their mission in spades as one money manager in California stated. Everyone reading this has seen the higher food and commodity inflation. This was all part of Mr. Bernanke's deliberate plan. He has purposely rigged markets for higher inflation and also a devalued dollar.

World inflation is now swimming in a sea of red hot inflation according to the Wall Street Journal.

Instead of ending the former crisis intelligently by raising interest rates to stop leverage and speculation; Mr. Bernanke, and the FED, have been busy engineering a new crisis in the making.

Check out the sea of red global inflation (click here to open the link) - thanks to helicopter Ben. If you think this is the end - you might just be hoodwinking yourself. The fallout from Mr. Bernanke's deliberate monetary inflation engineering may be just the beginning.

See also the three charts as below for our traditional follow the BBTL truth of trend and technical chart update, with the usual mark-up comments.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

On Time - On Target

2011-02-06T17:45:00.000-08:00

Hello BBTL Blog Readers,

W. D. Gann Theory versus KRTT Modernized Natural Law Theory

I remain on a demanding time schedule and will post updates as time permits, or as extremely important technical events occur.

I begin today's weekend blog as I have taught here before, by stating that financial markets are dynamic and important new events or information may need to be closely analyzed each day to allow for adjustments to our previous viewpoints.

Therefore keeping an open mind, (and being prepared to change our mind) while trading or investing is indeed a highly valuable principle.

Having stated this concept of new information being added possibly each day, I also want to emphasize that the financial markets predominately follow Natural Law.

This is exactly as the great W. D. Gann first taught us over 100 years ago.

However, going beyond a fixed or rigid 100% viewpoint of Natural Law, what my personal analysis and discoveries have added - beyond the amazing Gann theory, is that Man himself also attempts to intervene and interfere with Natural Cycles and Natural Law.

In essence, the financial markets are thus dictated by both Man and Nature.

For example, Ben Bernanke by his unlimited money printing and essentially zero interest rate policy is deliberately attempting to intervene, or engineer an economic cycle distortion, by extending or stimulating the basic business cycle (or even a weak economy) past it's normal termination point or normal cycle based on Natural Law.

In a nutshell, Central Bankers with their constant deliberate intervention techniques, deliberately distort otherwise perfect Natural Law and Natural Cycle events. This is one reason why in our more modern financial world we now see more boom and bust cycles and even financial crashes.

This is simply Nature - resetting the cycle to where it should have been.

The IMPORTANT KEY TO ALWAYS REMEMBER is that Nature, Cycles and Natural Law will ultimately prevail, - as they always have - and always will.

In essence, if Man deliberately intervenes and carries the natural financial market past one predetermined cycle point, whereby the trend should have changed, when a future cycle or Natural Law hot-spot is eventually hit - the change in trend becomes far more likely and potentially more violent or abrupt.

Essentially, the more Man interferes - the greater the boom and bust cycles and the risk of an all out market crash.

Without doubt, even an amateur should see, that based on the deliberate near zero interest rate policy, that has been prolonged - time and time again, Central Bank policy (even globally) could easily be nearing the precipice of a complete Bond Market Revolt, whereby global investors unanimously refuse to accept extremely low interest rates any longer, in a higher risk and higher inflation environment.

Most of you have now heard of the new age term - bond vigilantes.

It seems that the world has now been perfectly set-up by Central Bankers such as Bernanke, for an interest rate (Bond Market) revolt and show-down ,as well as a possible rising interest rate shock.

What might Mother Nature and Natural Law do, when this potential for an interest rate Tsunami cycle to hit and reach a tipping point? What chaos could be created in currencies?

My own analysis and observation, is that if the global economies of the world now have too much debt as a problem (based on past leverage and speculation from excessively prolonged low interest rates) , imagine the potential for an escalation and new focus on debt problems, - if interest rates were to suddenly rise.

Mr. Bernanke has a very big ego, and a seemingly unlimited supply of money. So far he has hoodwinked politicians and most of America into believing the FED is acting prudently and in their interest. Yet, if he truly believes that he, the FED or any policy of monetary expansion can control and intervene in natural cycles, or in any and all global economic situations he is mistaken.

To those whom understand not-interventionist economics (often called Laissez-Faire of Austrian School Economics) and the boom-bust bubbles the Fed is deliberately engineering, an otherwise respected man becomes delusional, if not outright dangerous.

It is my assertion, that Bernanke and the FED have not been able to grasp the dangerous risks of their own policies.

So what will prevail Man (Bernanke) or Nature?

CYCLES, ASTRONOMY and MARKET GEOMETRY

Normally, I do not reveal much about cycles and market geometry here on the blog. However, I have decided to make some exceptions now, due to the potential importance of nearing future Natural Law hot-spots.

Assuming I and my greatest teacher W. D. Gann, are indeed correct about our assertions of Natural Law ruling our planet - and also the financial markets, there are some fairly easy to spot guidelines or additional hypothesis.

For instance, Natural Law was been found almost everywhere in Nature. It is seen in yearly seasonal weather and farming (Growing) cycles, our calendar and time cycles, a woman's menstrual cycle, migration cycles of animals, or even in the aging process of our own species, or the obvious cyclical nature of the tides and moon cycles.

In essence, Natural Law does not show up just some places or in some sciences - it shows up on our planet and even the universe - everywhere. As Einstein once remarked, it looks like a God, or the creator of such a vast system, did not merely roll the dice in randomness.

Einstein by example, was able to write highly complicated observations about our universe and quantum mechanics using in the end - a relatively simple math formula.

Benoit Mandelbrot, did the same thing when he established fractal geometry.

So now what about the financial markets? Can we look at them using more than one version of Natural Law?

The answer is yes.

MARKET GEOMETRY

Some of you may have possibly heard of, or studied - market geometry.

Market geometry is largely self-explanatory (about financial markets, charts, and geometry) but moreover, is about the fabric of geometry woven between financial time and price.

The key belief is that changes in trend will occur when time and price are equal or at least in a harmonic proportion.

This is far too complex of a topic to teach here on the blog, but I will say that the current market geometry of the SP500 index is now rapidly approaching a near perfect state - and could even be spotted by an amateur at present. Why?

The time cycle from the last major cycle low (in early March 2009) is soon to be, - two years.

For instance, assuming you use Earth Calendar years of 365 days and assume the cycle low was March 6, 2009, then the two year point will be exactly on March 05, 2011.

Equally switching to the price topic, the closing price value of the SP500 on Friday February 04, 2011 was about the 1310 price level.

If we go back and look at the March 2009 price cycle bottom and use an approximate 667 price level for the SP500 at the cycle lo , and now consider the current 1310 level; the SP500 Index will also soon be at two times the low price level if it continues rising or, if and when it reaches 1334.

In summary, the SP500 Index is nearing two times price (1334) and two annual Earth years (March 05, 2011).

Those whom follow the Natural Law theory of Market Geometry should likely be using a time and price target of 1334 on March 05, 2011.

CYCLES

Deviating slightly from the above market geometry theory, which again was a form of Natural Law, the Great W.D. Gann was keenly focused on pure cycles and Natural Law as derived from the circle of 360 degrees.

Most of you have probably heard of the most significant Gann angle of 45 degrees, which is one-eighth of a circle, and also the Gann angle where time and price will meet on a chart (since one unit of time will equal one unit of price).

Assuming we were using Gann cycles based on the 360 degree theory, and not Earth Cycles, then the time target for the SP500 high would likely be 720 days (equal to 2 times 360).

This simply means we back up the cycle time target by ten days and use 720 days from the March 2009 low in the SP500.

Please note that there are other cycles involved beyond what is simply mentioned above.

ASTRONOMY - ASTROLOGY

Although using astrology (or astronomy) is indeed the most esoteric or difficult form of Natural Law to apply to financial markets, without a doubt it was indeed used and studied to verify and predict financial turning points by the Great W. D. Gann.

Since the early Gann teachings in this area of Natural Law surfaced over many decades (some which were hard to verify), a great deal of modern-day progress has been made.

As a result financial astrology software like Galactic Trader, Cycle Timer, Market Warrior and others are becoming cheaper, better, and more abundant. Better yet, many excellent books on this esoteric topic of Astro-Finance have been written.

Although it is far too difficult a topic to even attempt on this blog and further our KRTT theories are mainly proprietary, I will suggest that turning points in many financial markets often come on (or within a few days) of a new or full moon.

This means looking for a change in trend to occur around such days, may assist an advanced analyst to verify or even predict such changes in trend.

Finally, one of the biggest Astro events of every calendar year are the solstices and equinoxes.

Please note that I do not endorse trading or investing using Astro-Finance as a stand alone tool. It is however extremely important to study this area as many associated learning benefits can occur.

SUMMARY and TECHNICAL CHARTS

Several months ago on this blog, I forecast that I expected a major significant top to occur in the SP500 Index in the first quarter of 2011. Hopefully, today's blog will provide an insightful glimpse into some of the important reasons why I still hold this viewpoint as valid.

The 720 - 730 day harmonic cycle target and market geometry hot-spot ahead is in late February to early March. After that we approach the Spring equinox.

Keep in mind that markets can also fail or terminate early if a man-made upset occurs.

I continue to see this market as very high risk and advise caution, raising cash, and using tight stops.

As usual, a couple of technical analysis chart (that speak the trend truth ) are below with my usual mark-up comments. Enjoy.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Ignorance is Bliss - Just ask Ben

2011-02-01T19:25:00.000-08:00

Hello BBTL blog readership,

As one of the charts below comments, even with the tense global situation in the middle east (Egypt) and a USA stock market that is extremely overbought and statistically abnormal, - the SP500 Index continues it's upward climb and after today - has now gone up seven of the last eight days.

Some might falsely conclude that perhaps this is nothing more than a flight to safety given the better stability of the USA as compared to middle east tension.

Although perhaps logical, that with panic emotions investors might buy gold, or trigger higher oil prices (the Suez Canal), or transfer currency to the USA (higher fixed incomes prices and lower yields) in a so-called safety trade, frankly investor greed and false assumptions about the economy are far more likely.

In essence, economic or financial ignorance is bliss.

I believe however that the best explanation of this rally today, and since QE2, or even in the past twelve months, is that it is being completely engineered by the near zero interest rate policy and the multiple massive liquidity injections of the FED.

As we have also discussed a hundred times or two, the morning opening gaps in the USA SP500 and late day rallies are also extremely suspicious. More of that happened today. This all smacks of outright market manipulation by the FED, the PPT, or indirectly via their Wall Street banker association.Check out today's opening GAP which was huge. Then consider, what happened to hundreds of USA corporations - all overnight - and by way of this morning opening GAP; was there a justifiable (large) order imbalance? If not, then without a doubt, this was yet another antic of deliberate market maker, USA FED, PPT or Wall Street friends of Bernanke - market manipulation.

So given the ongoing rallies, whereby all trees in the USA grow to heaven, should we now conclude that all is well, and the excessive liquidity and zero interest rate antics of Ben Bernanke will save the day? Not on your life. By the way as a point of interest, although our blog references the USA markets and the SP 500 Index day after day, these same types of events are also simultaneously happening in other countries that manipulate their stocks markets. This includes - Canada.

How long can Ben Bernanke keep interest rates at zero? How long can he deliberately engineer inflation, increases in money supply, monetization of USA debt, bailouts and unlimited stimulus. Well if too much money is an addictive substance and creates speculation, irresponsibility, financial bubbles and crashes; now imagine that Ben Bernanke alone is creating - the biggest potential bubble in the history of the world.

Just recall what the exact same FED and Mr. Bernanke promised time and time again, while going into the crash? His reassuring words at the time that all would be well and fine were essentially 100% misleading and false. The same is true now. Anyone whom believes that the FED can save the USA economy is mistaken. In fact the FED deliberate manipulation and monetary engineering may have very adverse impact in due course.

For every action - there is an equal and opposite reaction.

If Ben Bernanke really wanted to assist or help America, he would stop manipulating the financial markets, stop unfairly helping his Wall Street banker friends, close the free-money credit window, and let the incompetent bankers learn from their own mistakes (which might actually help them), and more than anything - go back to University and learn about the real economic truth of applying Austrian Economics (and the benefits of non-intervention).

I have no option but to conclude, that the current Ben Bernanke led FED are being delusional and in err, if they truly believe that their near-zero interest rate policy, ever increasing money supply, their ongoing bailouts, and their adding (monetizing debt) billions in QE2 liquidity or the constant cheap-money tap to their bank friends will really help the USA economy recover.

In fact more likely, based on revealing the hidden (or reactionary) FED agenda would suggest a deliberate currency devaluation is in process (think big inflation), as well as pointing out that the main benefactor of these FED policies, is Bernanke's bankster friends (as they have been aptly named after the collapse) since they are the ones whom are really benefiting.

After all, what bank would not enjoy or profit from the almost unlimited supply of virtually free money from the wide open FED credit window, when they as banks, hold an oligarchy over the public and can immediately turn around and lend that same money out at significantly high interest rates (to profit from their controlled oligarchy).

Meanwhile, it is the middle-class and lower-class Americans as consumers and debtors who primarily continue to suffer the bankers wrath, as they are forced to use the ever-high interest rate credit cards, and higher cost debt, in an attempt to stay afloat while constantly fighting higher inflation and the spiraling cost of commodities - versus their stagnant wages and reducing buying power from a declining currency.

Lest we not forget the immediate past. Like USA house prices that soared out of control before they came tumbling down, commodities too have been heavily fueled ever higher by the deliberate FED engineering of inflation.

Consider that the USA sub-prime and USA housing crash were therefore created, abetted, and fully aided by the same too-much-liquidity and too-much-leverage via too-low interest rates and easy money that encouraged the housing and credit speculation and leverage in the first place.

Here in Canada it is no better.

As complete hypocrites, Mr. Carney as the head of the Bank of Canada, and Prime Minister Harper via the Conservative new tight housing ownership and mortgage rules, are telling the Canadian public that they are very worried about the highest-ever Canadian consumer debt loads, and excessive housing leverage in Canadian history.

Yet equally here in Canada, the prolonged near zero interest rate policy, and the same Central Bank past easy money supply is exactly and primarily responsible for encouraging public speculation while discouraging savings and monetary prudence.

It is sort of like the convoluted and foolish logic used or similar to, a Tobacco manufacturer telling their customers that they should not smoke, or a whiskey producer suggesting to the public that alcohol and drinking is unhealthy, so they cannot be liable for their drunken driving accidents. Easy money, like alcohol and tobacco, are essentially a substance abuse being proven as addicting.

So much for any responsible government that ever acted like a fiduciary. Why not simply raise interest rates and stop the leverage and speculation, and thus encourage savings and prudence.

So, here we go all over again. It will soon be bubble time in North America.

This time, Bernanke is busy fueling the USA stock market bubble that eventually has to burst.

In Canada, the ever cheap money is also fueling a potential coming housing crash in cities like Vancouver.

In essence when this is all over, any collapse should be attributed to and be named as - Bernanke's Stock Market bubble and the Bank of Canada manufactured housing crash. For every action - there is an equal and opposite reaction.

So, what to do now?

As far as stocks go - well obviously my market call that the market high might be in, as was indicated on my last blog - is wrong by virtue of today's higher high.

Please be patient for the final market high. The cycles here are inverting time and time again by the ever cheap easy money. The correction will come and perhaps, not too far away in time and price. Time and Price targets look ripe for late February or March at the latest. I stated months ago the final equity high should be in the first quarter. I still believe that this will turn out as accurate.

Perhaps today's best short-term bullish forensic evidence, is that the SP500 Index cut through the 1300 level today like a hot knife goes through butter. But ask how much of this was manipulation and FED fueled?

Having stated that, the massive opening gap in today's trading; again without real justification makes today's rally - suspicious as ever. But, no matter what our emotions or financial logic may say - we must listen to the chart and trend truth. For now, the short term looks up (but not by a great deal) and we will use the new 1300 level as a support floor.

The more difficult price level of 1300, which previously represented a key psychological and resistance level has now been breached. Short term this is always a positive.

Yes, as one astute comment stated earlier today on the previous blog, this immediately implies we have a market that wants to go higher - at least short term and implies new time and price targets.

The SP500 Index which previous failed at the same 1300 level just last Friday, has now taken out 1300 to the upside, which essentially immediately turns the 1300 level into a SUPPORT ZONE.

So remember, we can now use that same SP500 1300 price level again - if and when it is taken out to the downside. Taking out 1300 to the downside becomes a sell signal.

In summary in the short term, my new time and price targets are best shown on the weekly chart provided

Finally, as you go forward with your own trading or investing ideas, remember my past words of caution.

None of this rally is safe or secure.

We can all thank Ben Bernanke for his unlimited free money and heavy moral suasion to buy stocks. Yet financial crashes happen for a reason.

Mr. Bernanke has further fueled leverage and greed in stocks - just as he and Mr. Greenspan fueled leverage and greed in housing.

The only conclusion one can logically make, is that this is an extremely high risk equity market that is built on the sand castles of FED liquidity.

Sell and raise cash, use tight stops still continues to be my most logical suggestion for most of you. The first step to any good capital management is to protect capital and without any doubt, this is a great time to practice risk protection and avoiding losses.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Clear and Precise - SELL

2011-01-30T13:29:00.000-08:00

Hello BBTL Blog followers,

As I am short on time today and thus I have to keep this blog post relatively short, yet nonetheless wanted to get an important update out.

If you have been following the blog at all lately, you have been well warned about the general high risk and greatly overbought nature of many North American equities, and especially in the SP500 index viewpoint which I cover here in detail. Again, the SP 500 Index is an excellent bellwether indicator for many North American equities.

I believe the anticipated correction we have been discussing started with Friday's sell-off.

Therefore my viewpoint is clear, precise, and enclosed in a single word. That word is sell.

If you have not already raised cash and sold (as I had been previously advising) - you better have some very long term views that you are able to hold equities - potentially for years.

As I have also been warning, this is not an equity market for amateurs or those whom are passive and complacent. In a nutshell, the potential risk for a double dip recession and significant equity correction is high.

In fact as shown in recent months on our blog, this recent period is without a doubt, the world's most manipulated and bailed out equity rallies in history; which like a fragile house of cards, was built by a few single words - massive central bank bailouts and liquidity injections measured globally in the trillions.

For aggressive traders whom can now sustain higher risk, this looks to be a pretty good entry point to get short.

Although the world situation is indeed tense based on the situation in Egypt (which frankly spread from Tunisia) this is not what I believe is the true or actual cause of any coming correction.

As I have taught here for some time, the financial markets work by trends and cycles. Simply put we entered a very significant cycle hot-spot.

Although I technically do not discuss or teach much about the sophisticated inner workings of cycles here on the blog, I have for your benefit included today one of the easiest to measure and identify, and best known financial cycles - the Fibonacci events.

The two charts below show the cycle and trend truth better than any words I can express or write.

For those traders whom use targets, my first downside target area on the SP500 is a price window of about 1228 - 1244, or about 5% lower than Friday's close. I further emphasize that there is still a great deal of uncertainty in the identifiable Elliott Wave count.

The two potential valid Elliott Wave counts that I advise herein (and have for some time), are that the recent top at approximately the 1300 level on the SP500 Index (which failed) could be either of:

a) a minor three wave top in a major terminating wave five (this implies a sharp plunge down now in a wave four followed by one last significant minor five wave rally). This scenario is a complex top which is statistically more likely and thus is my primary EW count - or;

b) the recent top was actually a very real completion of the minor fifth wave up in that same major terminating five wave up which indeed is an extremely bearish signal.

Keep in mind as you trade and invest in the next few weeks - that either EW count could be valid.

At present, my view is that it is still too early to state which count is actually valid - with certainty. Going forward and by using standard EW rules should tell us the correct answer - soon.

In summary, the word I use to describe the current SP500 Index is - sell. See the charts below.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

TRUST NO ONE - SPOT THE TREND

2011-01-25T20:08:00.000-08:00

Hello BBTL readership,

Today was another one of those highly suspicious trading sessions that smacked of possible market manipulation, by the PPT, the FED, or the cyberpunk buy-on-or-near-the-open-and-close lackeys of Wall Street, in conjunction with those that carry out and desire such manipulation for their own purposes.

The morning and early afternoon equity trading session on the NYSE and NASDAQ were clearly down for most of the day. Yet, just before 3:00 PM with about an hour to go - the market rallied sharply to close UP on the SP500.

So now what to do?

Well the best advice as always, is to trust no one and SPOT THE TREND on the charts. This also implies that you must match your personal time-frame for your desired trading or investing personality to the appropriate charts. While some invest for a four year time horizon, others prefer to trade every four days.

In short and frankly, I really do not have a great deal more to add than what I have already stated.

If you are new to this blog, go back and read some of my older posts. As I have been saying in clear terms, this exuberant and highly bullish market cycle is easily identifiable on longer-term weekly and daily charts - as very tired and near capitulation and a change in trend to down.

Consider that the SP500 market recovery after the justifiable sub-prime crash of 2008, is up about 100% and in less than two years. At minimum, we are overdue for a correction of at of least ten percent. That number of a ten percent correction could also be too conservative, and we could begin a far more formidable trend down. Even Tom De Mark - himself a known market wizard, and expert at statistical analysis has recently called for a similar change in trend - to down.

Therefore consider yourself warned not only by this blog, but also a well respected global market wizard.

In the very short term (a few days), the market will now be further tested tomorrow - at the key SP500 price level of 1292. This same price level has already been tested three times (all from below as a resistance level) in less than a week.

In essence, a failure tomorrow to break 1292, will imply a market capitulation and possibly abrupt change in trend to down is very near.

On the other hand, if those same cyber-bot manipulators as mentioned above, again manipulate the open tomorrow by yet another unexplainable opening GAP UP, it implies the SP500 could set another new marginal high and then test the key psychological level of 1300.

I close today's blog by saying again that this is not a market to trust. It is not a time for complacent or passive investing.

For traders, or those more short term focused, we still do not have an ideal entry or perfect set-up, given the sideways trend of recent days. That stated looking out shorter and medium term, I remain of the opinion that the current risk is high and the next big move or coming trend is down.

Those that are more aggressive swing traders, and whom can take on higher risks and enter trades before a trend fully emerges, should probably acknowledge and see this equity market has many sell-setups.

Spot the trend on the chart and go with it. Two chart exhibits are found below with my usual mark-up comments.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Too Soon

2011-01-20T17:51:00.000-08:00

Hello BBTL blog readership,

Although the market sold off in the last two days in line with my bearish-in-nature blog recently, and directly hit a January 19, 2011 cycle target, it is still too soon to declare any significant victory or trend - in either way.

Clearly, the short-term trend has become more difficult for the bulls. That much is certain. Yet equally, instead of the aggressive or panic selling one might expect in such an overbought market, the nature of the selling in the last two days was more akin to mild profit taking with some exceptions in individual stocks.

Can we conclude the top is in? No, not yet - at least assuming one is focusing on trends.

Shorter term swing trading on the other hand, involves a form of market gambling or placing calculated portfolio bets against an existing trend while controlling risks and usually with a superior understanding and experience level of financial markets.

Some, might pull the trigger here in such an overbought market, in a short side SP500 trade. Yet, clearly, even by today's technical analysis (as below) the upside risks remain. Consider alone what Ben Bernanke wants. Remember the market maxim, which once was a near biblical financial rule to never fight the FED. At least until a little more short side evidence rolls in, one should conclude that a sell short swing trade is still less than an ideal trade entry (risk) in the case of the SP500 index.

For the bulls, the NYSE market internals were actually mildly positive today. For instance, there were still almost 150 new highs and only 31 new lows on the NYSE; nothing the bears could write home about. Also, although the SP500 finished the day in slight negative territory, the upside volume eclipsed selling volume.

In short, the morning selling was fully washed out by an afternoon rally, even though commodities like gold have taken a significant hit today and recently. Hello overvalued commodities; has anyone told you about - deflation? Is no one watching the recent gold sell-off? It has been a leading indicator for some time, and yet lately, is looking outright bearish. By the way, the gold sell-off is very much in line with our expectation and gold forecast made months ago.

Those crazy bulls, which I recently renamed as pigs, have clearly not lost their all too-brave and too-stupid buying-the-top nature - yet. Also, the NYSE TICK chart (as below) is still in strong territory and there is no negative divergence in TICK. This implies the bears may need to remain patient a while longer. A few more short-term pigs may need to be taught a market lesson the hard way.

Despite the ominous onset of a longer-term bear EW count which this blog has been depicting for months, the minor fifth wave may not yet be fully completed. Time will tell, yet such bullish markets as we have seen in December and January are statistically the exact types where Elliott extensions occur.

In cycles language, these are commonly referred to as cycle extensions. Therefore, a key forensic is to now watch and see - if key SP500 support levels are taken out. Later, bearish charts become more obvious with a series of lower lows and lower highs - if the downtrend is authentic.

On the other hand, and especially considering risk and money management issues as I have been discussing for some time, we can now firmly conclude that the market nature is slowly changing and becoming more bearish.

Essentially, social mood may even suddenly wake up here, and realize that there are many potential negatives in the economy, and especially one of the biggest potential shocks in 2011- higher interest rates - which I and most others believe will eventually come later in 2011. After such a prolonged period of abnormal near zero rates (engineered by the FED), the potential for a real interest rate shock in both equities and commodities is not to be overlooked - not to mention the economy.

You will recall, assuming you have been reading this blog, for many months now my overall market forecast and prediction for the SP500 was for significant top sometime in the first quarter. This predication still holds and is looking even more accurate given the last two days.

Given the irrational bullish exuberance and exceptional early-year rally so far in January, a more likely scenario now, is first to witness a bearish thrust down (initial shock), followed by one last bullish wave up, whereby the ignorant pigs bring the market back one last time as they line up to go to the financial slaughter.

This scenario, is also very much in line with some the strongest cycle targets I have in early March (or very late February), where a more major and final bearish change-in-trend (CIT) could occur. My final cycle target in the first quarter comes on march 19-20, 2011. How good is that, to have key cycle dates to watch for a CIT - in advance?

Further, as one of our astute blog readers and comments recently remarked, in a few more months the pressures will gradually build in 2011 on Central Banks to raise interest rates.

Then, as stated, the bond vigilantes will increasingly refuse to buy low rate bonds in a higher risk environments. Also, there is an emerging inflation risk in bonds in 2011. With all of the global bailouts and accumulated government debt in the financial crisis, one inflation certainty for sure - is higher future taxes - which will really hit already constrained consumers hard.

But, to add another wild card, what about the potential of a USA dollar crisis if Bernanke holds rates at near zero too long?

Recently, as example, the USA dollar index has been relatively stable or even subdued in trading sessions. The focus is still on the Euro zone. Bernanke surely feels safe.

This currency scenario however, could easily and quickly change for the worse, as debt issues cross the Atlantic westbound, or as further competitive devaluations for trade purposes between the USA (and mainly China) are scrutinized by nations now being adversely affected.

Their tempers are clearly rising. Trade wars too are a reality. Just ask Brazil, which recently had some not nice words to say about the USA, and Mr. Bernanke's monetary policy which constantly competitively devalues the USA currency and causes other currencies to inflate in comparison.

On a purely cycle analysis basis, I did have a very strong cycle target in January and frankly about the 19th, 2011. So far, the change in trend now in January therefore is - on time. But I constantly ask myself, will the all-too-easy FED money and FED moral suasion of higher stock prices once again invert another cycle?

What I want to now see in order to legitimize being bearish about the current trend, and for all future trend determination, is for the two key support levels of 1261 and 1251 to be taken out on the SP 500 Index. Support levels near a major high when taken out are key forensic clues. Consider the gold chart, which has successfully already taken out several support levels.

I expect the next highest support level of SP500 at about 1261 must be tested soon (by Feb 04 latest) or else, we could see a 1300 - 1335 level before any final SP500 implosion or capitulation. Remember, pigs are greedy.

For now, perhaps the best advice for short-term traders is to be patient, and let the charts tell us the eventual short-term trend. My current guess is clearly down with sporadic ABC pattern rallies. Again, watch for any sharp upside reversal (more wave five to a recent higher high) or alternatively, any downside support levels being taken out (confirming the top is thus in).

Keep in mind that we are solely focusing on the SP500 Index. Individual charts are a completely different story and need individual analysis.

By example, the pigs recently buying F5 Networks were already slaughtered with about a 23% loss in just the last two days. In essence, some individual charts have already turned down from their major or significant tops. The highs for those charts for all of 2011 may well be in the past. Others stocks near record highs may still have room for final rallies. Again, I want to emphasize that every chart must be analyzed on it's own merit.

In summary, although I believe the very short term trend is now down, and that we will at least test the SP500 1261 - 1262 level soon, it is clearly too early to call a significant trend victory on either bullish or bearish side. We need more evidence.

However, one thing which I have been preaching a lot recently, still holds as true.

Overall this market is expensive, and we are absolutely near a major equity top in my viewpoint. Therefore, the basis of risks versus reward, I say raise cash, sell, or use tight stops.

Two charts are included below with my usual mark-up comments. Follow the trend, or if you consider yourself an expert, go ahead and swing trade. Both types of traders when proactive and savvy, use stops to protect capital to ensure their long term survival.

A lot of blogs close on the words "good luck" but frankly, earning a profit is a lot more about achieving and mastering market intelligence, financial education, discipline, and experience.

Spot the trend and go with it and forget what you read or hear. If you find yourself relying on hope or luck in your trading or investing, consider calling me personally for some needed one-on-one financial education, or personal financial tutoring. Consider it an investment in yourself.

Financial education by the way, works far better than luck.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom

Bull Bears and Pigs

2011-01-17T20:16:00.000-08:00

Hello BBTL Blog readership,

The markets were closed for Martin Luther King Day, and thus I took advantage of the extra holiday for further review and to post more of my most recent analysis. See the charts below.

Some of you were wondering about my fewer postings recently. The first quarter of 2011 is a very busy time for me, and therefore, I advise that my postings may be less than regular or frequent time intervals. Naturally, if something big, or a trend changing event takes place - that I have not already advised about - then, I will do my best to get a quick blog posting out.

As I begin my post today I want to point out that recently, I have received some sarcastic and ridiculing comments posted on this blog (the offensive ones were simply deleted and now I have been forced to moderate comments) and further in recent weeks, even personal emails ridiculing cycle analysis and suggesting that I should throw in the towel, or capitulate, and become bullish as evidently some other blog or analysts have.

The emails and some blog comments thus suggest the blog postings are outright wrong, and in essence worth no more than trash. Given that this is a public and open blog, I have elected to make this topic open for debate and further comment, as opposed to keeping anything hidden. In essence, this is a request for comments to our blog readers, especially if your have read this blog for several weeks or months.

Yet, let me suggest to you now - that sending in such emails or posting such comments on this blog will not change my market mood anytime soon. I also believe changing my market mood (cautious if not outright bearish on certain financial instruments recently) is not even in your best interest as readership.

Assuming most blogs were outright bullish, as some have emailed and suggested to me, then this blog would provide a very good balance.

However the core or my cautionary argument, and our discussion herein this evening may be more about money management and market logic, than simple trend following . Read on.

But on the other hand, having now started this blog which can be seen by global masses and a variety of individuals, I too have learned a valuable lesson about human nature.

Therefore, as a warning and before I begin tonight's blog, let me officially go on record to say and warn to those whom see fit to send in outright hostile, or stupid criticism in an effort to waste my time, or in some vain attempt to ruin the learning experience here for others, that I may at my discretion temporarily, or permanently, ban your IP address if you get stupid.

Naturally, this warning pertains only to a small fraction of our blog readership that seem to refuse to act and write civilly.

To most of you as readers, it is probably already inherently too obvious, that some people while using the internet, believe that since they believe they are hidden, or can remain anonymous, they thus have unlimited power to feel free to say, write, or do anything at their own will.

The internet and use of this blog is a privilege to all, and I remind everyone that democracy and the internet, and this blog included, is not a right to do or say as you want - but rather as you ought.

If the hostile comments, sarcasm and ridicule issue became problematic, I might also elect to password protect the blog in the future. Worse, I would do a paid-only blog which I already know is feasible given the content I can post.

Therefore, please remember to act and write your messages to me or this blog accordingly.

This means - think carefully before sending this blog or me personally verbal attacks including sarcasm or ridicule emails, and posting stupid comments on this blog. I do not suffer fools gladly.

Back onto the more important topic of this financial blog, while acknowledging the bulls have been correct in the short term, and that the bear may need to be patient a while longer, there are several very real problems I have with being bullish at present.

Moreover, if you have followed the blog in detail over recent weeks, you would already essentially know all of the following that are highly problematic with being a bull:

1. The Elliott Wave (EW) Count of a coming fifth wave is bearish. The longer term EW count for 2011 could in fact be quite ominous, and to add complexity at present, I am working with both a primary or preferred EW count, but also, a secondary count.

The two counts were recently explained and both are near term bearish. I have already pointed out that they allow for minor amount of upside room. Assuming the market illusions of grandeur continue, and the pigs continue buying, or that the market is being manipulated higher by hidden forces, I want to acknowledge that the SP500 may even reach the 1335 level.

Yet frankly, that would not make me necessarily wrong (assuming you follow my market logic) but only serve to make me more bearish using the EW and other theory involved in that same market logic.

2. Consider that at present and for some time, there are considerable negative divergences in technical indicators (the new high-low ratio posted below is yet another example). Although negative divergences do not tell exactly when a correction might occur, and markets can tend to stay overbought for prolonged periods (as they are now), my experience has taught me not to ignore these negative divergences.

3. Additionally, I have repeatedly discussed the ongoing possibility of outright market manipulation. This was made even more obvious (as a matter of fact) given the FED 's aggressive monetary policy and moral suasion even to the point of a Bernanke December TV appearance.

Expressed using cycles - and as I have also taught here of man-made upset mechanisms (which temporarily change or invert natural cycle trends), a cycle inversion has now likely taken place due to this Bernanke FED policy of QE2 - and the current highly abnormal FED monetary policy of near zero interest rates for a prolonged time, which eventually I believe will pose more problems than solutions.

4. Finally, after going bullish on this blog at the beginning of September, and for several months now I have stated on the blog that I expected a significant market top in the first quarter of 2011.

So far, that same forecast made months ago continues to look and potentially be very accurate. The first quarter is not over and time will tell.

Yet frankly, some of you have asked or prodded already that I should capitulate and change based solely on greed or what I see as buying close to a top. It would be extremely foolish, if not outright stupid, to tell everyone to get bullish just a few days, or even a few weeks - from a major market top.

My caution in recent weeks is in essence, to prepare our readers of my views in advance of that potential major top, as opposed to telling you all - after the fact.

Although I do not usually talk of specific cycle details, KRTT has in it's possession and applies considerable advanced cycle work in making many of our market projections. This included the projection of a top in Q1 or 2011. Our blog has already featured some interesting and educational cycle education in both Fibonacci and even Astro Cycles.

This cycle inclusion in that regard makes this blog absolutely unique and far more valuable.

At present, there are several prominent cycle targets within the first quarter, that I am now looking at.

For instance, one important cycle target comes later this week about January 19-20th, 2011. Another comes in early February.

Last but not least, and for the record, I was there advising friends and clients to buy when the SP500 was 666 in March of 2009, and was also there advising this blog to buy the SP 5090 1010 low of late August, and early September. Moreover, I was getting bullish using an analytical swing trading approach in advance.

Again, the idea to make and generate a profit is by beginning with a lower risk entry point, and therefore in essence to buy the lows, and not to revert or be forced to buy the highs or even adopt a higher risk entry point - solely based on greed.

So, for you persistent bulls that those that believe all trees grow to heaven, and to all those that wish to aggressively say in emails or sarcastic comments and whom want me to now capitulate, I say to you; go ahead and buy here.

Equally, let me also suggest to you that you may wish to consider learning the old market maxim about bulls, bears and pigs.

Bulls and bears have a far longer life span on Wall Street and Bay Street. Yet they are frequently wrong, but nonetheless have some basic market intelligence. Their wounds over time will teach them to increase their market knowledge and education. As a result the best animal on Wall Street is the hybrid bull-bear.

On the other hand, the greedy pigs whom usually laugh at both bulls and bears, appear to be very stupid financial creatures, and often aggressively buy the tops (or sell the bottoms). Usually, as a result the pigs soon go to the slaughter.

Expressed more simply, the equity market as measured by the SP 500 has statistically outperformed dramatically since late August 2010, (when I turned bullish after the summer correction) and done so in the middle of a highly questionable economy.

Longer term fundamental analysis such as PE ratios (an excellent tool used by value buyers) also now suggest that the current North American equity market is extremely expensive and thus highly vulnerable - especially if the market mood or the economy should reverse or worsen.

I believe that more than anything, the major explanation for all of the the most recent bullish events is solely being fueled - not by sound market logic - but rather is being driven by a highly risky US FED policy that will someday probably cause considerable angst.

There should be no secret that the Central Bankers globally, and especially the Bernanke led FED, are intent on monetary policy intervention tactics that have created and fueled a boom-bust economic cycle - time and time again.

After all now months later, there has been NO realistic equity market correction for some time.

This is now statistically abnormal. Therefore at the very minimum, I would want to see some form of more realistic sell-off before I became anything even close to bullish. Again, market entry points are made on lows - not highs.

Finally and perhaps most important, this commentary relates and applies only to the SP500 index, although as I have pointed out several times, there is also a high correlation to certain other global stocks and indices. Frankly, on certain equities and asset classes and even selected economic sectors, I am outright bullish.

Lessons Learned

The entire concept of money making and profit, in any investment or trading forum, is generally to buy low and later - to then sell the high. Unfortunately, human emotion (especially fear and greed) and usually a distinctive lack of financial education, make this very hard for some to achieve.This is exactly what this blog attempts to educate on.

Also keep in mind for you own capital protection, that there is no 100% accurate market advisory in existence.

Some of the sarcasm and ridicule comments mentioned above, and that I have reviewed look extremely foolish, or depict a highly amateur or unskilled nature.

Moreover, as I have taught before on this blog, it is only a matter of time and experience, when one day a trader or investor wakes up and realizes and fully comes to understand, that to be a savvy financial professional, or even a good amateur trader, will requires placing risk management and risk determination, first and foremost.

This means risk and overall market risk, as well as trade or investment risk must be assessed well ahead of any feelings of greed or a desire to profit. Once in a trade or investment, the market dynamics will also require ongoing risk management. In that regard, what some of you may see as wrong, is essentially my personal views towards pro-active risk management.

Those however still wishing to convert or change this blog, or those whom believe or want a 100% percent accurate financial blog written while using simple trend following - is also not a problem. Actually it would be very easy for me to generate.

After all, a trend following approach is simply generated after the fact.

I know of one such paid sight that has thousands of paying subscribers. Is that what you really want? Trend following is also one of the first tools and most basic technical tools and market techniques taught by me (and KRTT).

So if you wish, go ahead and cast your votes. Speech now or forever hold your peace. Frankly and again, it will also be a lot less time consuming for me to generate and publish such a simple trend following blog.

Here is what a simple yet 100% accurate trend following blog might look like given 100% after the fact accuracy. Is this what you really want?

5 day trend - up
14 day trend - up
60 day trend - up
200 day trend - up

This is easily set-up even by an amateur investor with little experience, using the most basic form of spread sheets, moving average, or more accurately by applying mathematical regression analysis.

What this blog attempts to teach and educate on is a great deal more.

In my own personal opinion, this blog takes you as a reader, or as a financial student or hobbyists, or even as a financial professional (we have a few pros and even portfolio managers that read this blog) far beyond the obvious real time trend-following market advisory service as provided here on the SP500 Index.

Yes, this blog uses and has adopted a swing trading and far more difficult - forecast in advance - approach. Then going much further, it attempts to generate and create the highest quality financial education on a wide number and range of topics that I have decided to teach the public .

Is it valuable? That is up to you the readership to decide? Naturally, I would enjoy receiving every readers feedback.

Finally, for the vast majority of our silent readers whom usually do not post on this blog, perhaps more of you should join into the comments section, and if you wish, make positive or realistic suggestions for change.

As I promised more of our ongoing analysis - here are three updated charts which have my usual mark up comments. They are self-explanatory.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
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SP 500 Chart Update

2011-01-12T23:51:00.000-08:00

Hello BBTL Blog Readers,

As my time is very limited this evening, I am simply updating with three charts of the SP 500 Index in different time frames.

By far the most important chart is the weekly chart shown first, since it updates the bigger equity outlook picture.

By the way, this chart format is the exact same chart format last posted here on December 01, 2010, on the blog and also posted earlier in November. As you may recall, we used this format to discuss and forecast the Fibonacci event, which now in hindsight was a bullish market acceleration up after a truncated wave four correction. That event was on time as scheduled about December 01, 2010.

Notice on this weekly chart a NEW ELLIOTT WAVE COUNT.

To err on the side of safety, the weekly chart now depicts a more conservative and far more bearish count of now being in the fifth of the terminating fifth.

The alternate count (also still valid) is that we are currently in the third of the fifth (with the logic that the third wave has now extended - also called an EW extension).

Also, on this weekly chart, you will further note, that I have depicted the next scheduled Fibonacci event on the FIB Ladder.

This now suggests that by applying our current overall market logic as posted on our blog, a serious correction should commence in the last two weeks of January 2010, or very early February if just one week late. This allows for a margin of error, of just one week early or late.

The daily and one minute chart posted below are self-explanatory and have my usual mark-up comments.

QUESTION and ANSWER

On the last blog a comment was asked if this so-called manipulated rally could last until March. I thought the answer might be useful to all so I am responding here on the main blog.

My answer is naturally yes. Anything could happen. Moreover, I again say that my own forecast made months ago was for a final and important top within the first quarter of 2011.

Moreover, speaking of manipulation, after all I do not have a red phone connected to Mr. Bernanke or the Plunge Protection Team. Having stated that with a degree of sarcasm, that is not what I expect to happen. As I mentioned in the weekly chart upcoming Fib event, later in January (or even very early February) there are some important cycles for the current market to overcome.

Although I generally do not discuss cycle details here in the blog, these important near-term cycles include no less than three distinctive categories of cycle events such as Astro cycles, Fib cycles (see the weekly chart included here), and even Gann time cycles that in this case fall very close to each other in time later in January.

There are also two important points that some of you may have missed or have failed to learn.

This BLOG uses a SWING TRADING FORMAT versus a TREND FOLLOWING approach. This is one of the main reasons why this blog if far more valuable and useful to the readership. That should be self-evident, but if it is not obvious, then perhaps ask me to explain later as time permits.

Secondly, the first rule of money management is not to lose capital or expressed differently, to take on stupid or excessive risk. I repeat, that in my viewpoint, the current market risk to reward at present is extremely poor, and by my estimation is at least 4:1.

In summary, trade what you see on the charts and not what you think or hear. The charts posted today have many clues and insights.

ERROR CORRECTION - The 1 minute chart above should read.....driven by futures "BUY THE OPEN PROGRAM TRADING" ....The market remains expensive, heavily overbought, and likely being manipulated by large or deep pockets - THUS SELL OR USE TIGHT STOPS

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
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New Year But Same Story

2011-01-10T23:18:00.000-08:00

Hello BBTL Blog readership,

A sincere Happy New Year to all.

After a two week holiday hiatus, I will return to my normal blog postings soon.

For now, let me say that my early technical and other financial analysis conclusions made after just a brief review today, continue to indicate that a very high level of bearish caution is warranted. In that regard, little is new.

Perhaps most important to reiterate, several months ago in this blog, I forecast my belief that a major market top should occur sometime in the first quarter of 2011.

That particular forecast was made using sophisticated cycle material and considerable other analysis, including Elliott Wave observations and still holds out as valid.

In the interim, I have also posted two technical charts below that are largely self-explanatory of my early 2011 analysis conclusions.

Again, best wishes to all for a healthy, happy and prosperous 2011.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
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Silly Last Minute Shoppers

2010-12-20T23:23:00.000-08:00

Hello BBTL Blog readership,

Financial markets are now winding down for the traditional Christmas and New Years holidays. As a result, my blog postings will become less frequent over the next two weeks.

However, I will do my best to post a timely blog, if and when anything big happens. Further should I change my mind about the market outlook which I have made bearishly very clear, I will also post an update regarding any change.

Going back over my last posting or two, one can read that I was largely bearish. For the record, I remain so today.

In those recent blogs, I had been discussing the current bad risk to reward relationship, and also the elastic nature of financial markets to snap back as they get too far above a moving average. In that regard, absolutely nothing has changed over the last week or so, and thus, all of the risks I was previously describing still remain.

I see the lack of selling recently, as typical of highly complacent holiday period optimism. It may also be based on the Bernanke QE2 events recently (adding more liquidity), in that there has been some potential fear in large institutions that were deliberately influenced by the FED to believe that selling now - is not a good idea. After all, Bernanke is a powerful man, has expressed a the concept that he desires higher stock prices, and the PPT is well known by savvy institutions.

Yet, as it stands the SP500 Index closed just one point higher today, than the trading high of last week, thus tracing out a perfectly sideways market.

I have previously taught the valuable and important principle before on this blog, that momentum precedes price.

Like a car goes into neutral before reversing direction, financially this implies that a stalled or sideways market, especially after a several month run-up, is in huge danger sign of possible trend reversal. Moreover, the longer the sideways trend lasts, the more probable that a reversal will happen.

Does any of this ring your caution ahead - bell?

Moreover, those traders and investors on the buy side of the markets lately, are indeed very similar to the silly late or last-minute Christmas shoppers. In short, they are not smart or intelligent savvy shoppers that seek high value by tactical planning.

By now, and at the last minute before Christmas, all of the good past bargains are long gone, and the picked over products that remain are simply too expensive.

In essence, buyers who now choose expensive Christmas gifts (or last minute expensive stocks) which are being purchased very late or at the last minute are really the suckers whom are likely to be in for deep disappointment, when January comes with far cheaper prices, or at a time when better values will flourish.

In essence, planning when you buy stocks, is not a lot different than how you plan to buy Christmas gifts.

Nonetheless, some of the highly stubborn bulls will refuse to believe such practical advice and sound risk-to-reward money management talk. The bold bulls seem to be dominating the financial conversations and news media lately. There is a market maxim about bold bulls. Right now I suspect that the more practical and value driven bears are smiling to themselves, as they sell stocks to the bold bulls.

Yet frankly anyone, with a little perspective, market knowledge and hindsight could easily realize, just how shallow this overly optimistic bold bullish talk really is.

Consider that the April 2010 high in the SP500 Index was essentially the 2019 price level, implying that today's record yearly close was just 28 points higher. Here we are eight months later and just 2% higher in the SP500 Index. Does that sound like a raging bull market? Not to anyone with a few years of market experience.

Frankly, and more in speaking about the financial truth, this is a classic or textbook technical analysis double top pattern, whereby a marginal new high is set on the second or subsequent high.

Yes, the negative divergence is there screaming caution in many charts for those with intelligence or those that will notice and listen.

I have observed recently that some BBTL blog followers might be trying in explain the current financial markets using logic or select economic data. I certainly hope that you are not being brainwashed by the media spins. This jump to conclusion approach - based on the latest popular spin, is not just a bad idea - it is a very bad idea in my opinion - that will garner poor or mixed results at best - over the longer term.

I must therefore again suggest to those involved, and wanting to gain a better financial education based on the financial truth, to download and then read the free editorial on research methods on this blog, or even read a few of W.D. Gann's books.

I will say again with emphasis that the financial markets follow Science and Natural Law, rather than logic.

Speaking of Natural Law, tonight is an extremely rare full lunar eclipse that directly occurs on the winter solstice.

The last such eclipse on the winter solstice was in 1638, 372 years ago or about 4434 months.

Most of our KRTT clients have been educated in such powerful cycles and the significance, but unfortunately that is well beyond the scope of our free blog.

In conclusion, although the equity markets may drift over the low volume holiday trading sessions, make no doubt about it, I remain of the opinion that a high degree of future bearish caution is warranted.

My general advice based on what I observe is that conservative types should sell here, or at minimum use very tight protective stops.

The two graphical chart exhibits with my usual mark-up comments speak volumes about the trend truth. Again, I will do my best to update the blog as I see fit, and especially, if things or my opinion should change.

In the meantime, I would like to personally wish all of our BBTL blog readers, a safe, healthy, fun, and love filled Christmas, as well as a prosperous New Year in 2011.

I will be staying up late tonight to catch a rare glimpse of the blood red Luna eclipse and solstice event.

PS - In a future blog, if there is enough interest, I may discuss the statistical nature of financial markets when lunar and solar eclipses occur in close proximity. This is relevant now since a solar eclipse is also just 14 days away.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
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Sell Signal

2010-12-15T22:18:00.000-08:00

Hello BBTL Blog readership,

My review of the latest two trading days is brief this evening, and mainly by way of two charts as found below that speak clearly. In a nutshell if anything, my previous forecast of a new emerging trend down is being reinforced.

As for any financial news, yesterday's FED announcement was largely a non-event, and Mr. Bernanke had no new monetary inflationary rabbits to pull our of his magical FED hat. The news release can be found here.

Perhaps more important from a financial news perspective, is to watch the USA dollar versus the Euro. The fragile sovereign debt situation in the Euro zone is ongoing. These financial flair ups can create further short term volatility, and significantly impact currencies and global bond yields which have been rising faster than most expected.

As for the trend truth and the most important technical perspective, the record high in the SP 500 at about the 1246 price level was set Monday December 13, 2010. Thus, it is still too soon for a change in trend (CIT) to suggest a fully confirmed down trend is in place. Trend traders usually wait a few days for the trend to get established and be visually confirmed using technical clues.

After all the high was just two days ago and therefore still to early for technical confirmation. Although frankly, today's bearish trend reinforced and followed along nicely with my previous cycles forecast (CIT December 13 - 15), the Fibonacci event demonstrated weeks ago, and even the planetary Gann Astrology set-up found in the Astro-sky challenge.

Of paramount importance, this is one of the rarest of financial blogs that also forecast with the benefit of considerable and powerful cycles knowledge. As the great W.D. Gann pointed out approximately 100 years ago, time (not price) - is the master control factor, and the financial markets including equities follow exact rules of science, or as Gann then expressed - Natural Law.

In summary, all of the cumulative evidence I have reviewed recently, including powerful cycles data, suggest that a change in trend (CIT) to down has already taken place. As one chart below shows, a mechanical method of trading using the Net New Highs of the NYSE also confirmed a short-term down signal today.

However, I should advise that possibly working opposite and against my short-term bearish forecast, of an immediate downtrend getting underway now, I observed that the marginal sell-off in the SP 500 today looked very controlled.

This could suggest that Wall Street traders, and highly influential powers including large hedge funds, or even the PPT, have very large bull-side bets placed on the recent bull trend until triple witching expires this Friday.

As one additional item, I was surprised to see that very few blog readers actually took the time to watch the video web link posted in my last blog. I believe this highly important video speaks volumes and is essential viewing to understand some of the coming events now besieging America, and perhaps becoming even more important in 2011.

Again, that video which I titled as Wall Street Crooks can be found by clicking here.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
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Sell Week

2010-12-13T22:39:00.000-08:00

Hello BBTL Blog followers,

NEAR a TIPPING POINT

At the risk of sounding like a broken record, I hate to keep on suggesting of a parallel between US equity market prices and a Bernanke, FED, and Wall Street manipulated roulette wheel made of easy money. Yet, I begin my blog of the SP 500 Index, by an observation that the index again gapped up at the open of trading today.

If you need to better understand my forensic view on the many opening gaps recently, I suggest that you go back and read over recent blogs.

Today's SP500 prices after an obvious gap, went onto set another nominal new high for 2010, and frankly then came close to their high after just one minute of trading.

The nominal new high made today in trading, is also another forensic clue that is suggesting it is becoming increasingly difficult to expand the elastic nature of prices higher and higher. But, when will prices snap back?

A more normal equity market, or one that was not interfered with, or manipulated by the FED or PPT liquidity would probably have corrected months ago. Yet money mangers with sell-side tickets, after seeing another obvious opening gap naturally become less motivated to rush their orders to market. Greed however, and stupidity have a way of haunting one later.

Also, the ongoing morning gaps up - especially since QE2 was announced formally, become a stark warning to any sellers and short-sellers, that Ben Bernanke as the most powerful man in America, wants the USA equity markets to be inflated higher, thus suggesting that anyone going against FED policy will pay a high price.

Mr. Bernanke's espoused belief is clearly that as more money is being made in an artificially elevated stock market, it is good for America and will add inflationary fuel, to chase other sinking prices including US home prices higher.

Sadly Mr. Bernanke clearly fails to understand Laissez-Faire Economics, Financial Natural Law, Financial Cycles, or even the more obvious boom and bust in financial bubbles as elastic-in-nature prices become stretched, or collapsed by abnormal means.

So what is the best way to summarize a trading day? I suggest you look carefully at the close of trading.

Despite all attempts by the FED use of moral suasion recently, including an unprecedented Bernanke TV appearance, and trillions of FED and taxpayer dollars to inflate and ignite the economy; by the close of trading today equities still closed at their lowest daily level.

Once again, the SP 500 Index came extremely close to another powerful key reversal day or technical clue suggesting a tipping point is very close.

US FED Meeting This Week - Calling a Bluff

Although Bernanke's credibility and popularity is sinking, all eyes will again be on him this week, as the FED sets policy in the middle of the trading week, normally with the usual convoluted Fed speech lingo.

At the early November 2010 Quantitative Easing announcement, Bernanke by example promised his QE2 policy would keep interest rates low. Frankly, the exact opposite of lower interest rates has happened since the Bernanke QE2 announcement, as bond vigilantes globally grow more impatient and increasing in number, thus sending interest rates in fixed income instruments like 10 Year USA Treasuries soaring.

I believe Mr. Bernanke will be watched very closely this week. In fact, it may be his last chance to show that he is in FED control. Any appearance of assertive power is a common characteristic of many men believing that they are smarter than they really are.

However money mangers globally, who play this false game of watch and see, will be considering the economic data and at the same time asking themselves if Bernanke has any new rabbits that he can pull out of his FED hat.

Frankly, I would not hold my breath about Obama's recent tax cut policy either, or any more smoke and mirrors from the FED window provided this week. As I have said one hundred times or more - the financial markets will ultimately be ruled by Natural Law's trend and cycles.

In essence, if anyone logically researched the cumulative the SP500 daily interactions, of index buy programs (based on futures) immediately on the QE2 announcement, then followed by morning opening gaps, and a failed attempt at equities to correct in November where the market also looked to be suspiciously supported, one could easily surmise that the USA equity markets are being held steady - until year end.

But then what? One long equities should hope that 2011 will not become known as the monetary hangover of a FED stimulus that caused yet another financial bubble to implode. What would Gann or Elliott say to Mr. Bernanke?

Technical Truth

I called today's blog - Sell Week - because frankly, any prudent or talented money manager (in my humble opinion) should clearly be selling here.

Sell Week, also nicely aligns with powerful cycles for an upcoming change in trend now due this week, as I first educated, showed, and forecast weeks ago using powerful weekly data and harmonic math in my blog and chart titled as Coming Fibonacci Event.

In summary, the North American economic indicators are far from strong (some are terrible), corporate earnings ahead in 2011 are a huge gamble (stocks as a leading indicator and anticipate the future), and for value driven and risk adverse mindsets, past experience in recessions, and slow or stagnant economies now show that PE multiples in such circumstances are far ahead of themselves (value less than ideal or even average).

Above all, as the 2010 year ends, and premised on the financial facts as opposed to some financial guru or market maven opinion, the technical indicators including simple and complex, and our cycles strongly suggesting that selling now is intelligent and logical based on the evidence at hand.

That stated, the one short-term remaining bullish perspective that I must add, is the current trend is still technically up - at least for now.

This implies anyone deliberately selling the existing uptrend is a swing trader, or possibly a risk adverse investor. Clearly, once properly financially educated to use all of the available technical and cycles analysis tools, swing trading against a trend is far harder to achieve accurately, then by simply waiting for the trend.

Therefore the caveat added here, is that conservative trend traders, or highly patient and savvy trend following investors might wish to wait for the down trend to establish itself. In such an overextended market, this too has obvious risk covered in recent blogs.

Given the cumulative and overall evidence, it is thus my opinion that this market should start to show more signs of higher volatility and a change in trend to down sometime very soon and this week.

Nonetheless, based on intelligent observations, it is somewhat possible that Mr. Bernanke, and the Wall Street PPT have a secret mandate to keep USA equities up, or in stable condition until year end - now just days away. Perhaps, in calendar 2011 Bernanke, Wall Street crooks, and the PPT will not find it so clear, or easy.

The charts below are posted as a sharp reminder that the financial truth is only found in the trend and cycles.

The great American W. D. Gann told Wall Street this science fact over 100 years ago. Evidently, not many globally listened, and certainly no Keynesian economist.

Are You a Market Wizard Continued? None of the answers submitted to me in the recent Astro challenge were close to what I had hoped. Again, rather than send me your reply, please post your observations in comments.

Therefore, I have also included the Astro-sky chart for December 21, 2010, tonight for a second Astro challenge. The concept herein is simply to help enthusiasts to better understand, - especially since Astro-finance blogs are rare.

Astro - Sky Question Tonight (BTW this one is far easier - yet also very powerful) Assuming the SP 500 market will change price levels and increase volatility in the upcoming trading week (until December 21, 2010), and also using the recent posted December 13, 2010 Astro Chart for comparison; - ask what Astro body will change (and how it changes) the most?

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
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Cycle Alert

2010-12-09T19:53:00.000-08:00

Hello BBTL Blog readership,

Market Mavens and Financial News are Often Wrong

The update tonight is straight forward, short, and largely reiterating my ongoing short-term equity market caution, in spite of the nominal advance in USA stocks today.

Again, I caution that it is futile to follow the daily financial news, or to put too much emphasis or faith into the stock market action of a single day. This is truer when the price move is small (an inside day) and on low volume (which suggest mere volatility).

On the other hand, when prices breakout strongly from a previous trading range, and do it on massive volume such as in the case of Eastman Kodak today, there could be a lot more happening in the forensic price and volume clues.

What I am suggesting is that by watching for high volume large price increases, it has far more trend significance than the financial news. Ask yourself, what was the huge financial news in Kodak today that caused the huge price move in Kodak on multiples of normal volume?

By example of useless and distracting media noise, the recent Obama announcement of the ongoing tax haven hiatus, or more handouts to the unemployed, have led some USA economists and many media sources (including financial behemoth PIMCO) to suggest this is a very welcome stimulus beyond a mere monetary carrot, that potentially is a game changer for the economy, indicating more robust growth ahead.

The financial media while looking for the hot story daily, instead of understanding the real trend truth of Natural Law, or being alert to tired trends and cycles, immediately determined the Obama announcement is why USA bonds fell so sharply in price this week. Bond prices always go down (and yields up) on strong economic news, or particularly higher inflation, - right?

Yet frankly with US bond prices falling this week due to a story of a better coming economy, or possible higher inflation down the road as a result is convoluted and far from guaranteed. Has the past trillion dollar stimulus moves helped unemployment?

Or ask why, at the exact same time this week, (which is supposedly inflation sensitive) did gold get hammered and also fall sharply? So essentially gold and US bonds were strongly at odds. Which one is telling the inflation or deflation truth?

In summary the daily financial media hype, although newsworthy and potentially interesting to some, is not indicative of the trend truth (except in rare cases we have described in the past).

The road to profit is always by determining the current trend.

This can only be properly accomplished by technical analysis - or as I call it; the new and emerging science of trends and cycles using advanced technical analysis.

Remember the old financial maxim that the trend if your friend. Spot the trend and go with it.

Cycle Alert

Having updated several cycles this week, I have slightly extended the previous discussed cycle hot-spot or time window for a possible change in trend (CIT). The current cycle hot spot for a CIT is amended to Monday December 13, 2010 until Wednesday December 15, 2010.

Chart Truth

Two technical charts exhibits below relating to the SP 500 Index and the NYSE new High Low Ratio are largely self-explanatory and reiterate caution.

Astro-Sky Exhibits Below

A few of our blog readers have sent me their personal responses to the Astro-Sky Challenge in our last blog. At present, no one is close to what I was hoping to demonstrate. As a result, I have posted the two Astro-sky dates as below using a geocentric layout, to ensure that everyone is using the same tools.

If you wish to comment, rather than writing me directly, why not help others by posting your answers in the comments area. There is no wrong answer as you are only sharing your observations.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
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Gaps - Stock Market Manipulation ?

2010-12-07T22:21:00.000-08:00

Hello BBTL Blog readership,

My posting is late this evening, and therefore my missive will be short.

However, do not be fooled or rush off as the three chart exhibits below are worth far more than any words could describe. I have said it before and will say it again; the only trend truth is in the charts. Spot the trend and go with it.

Moreover, financial markets work by Science and Natural Law; not by what any man says will happen.

Be Very Careful or Get Out

Also, my current position is well known and clearly stated. If you need to question my current equity market viewpoint, go back and read some of my recent postings.

However in a nutshell, my position is that until a more realistic equity correction is allowed to happen the markets are extremely dangerous. My message would include that if you are long and cannot take on considerable risk and losses, use tight stops. If you are smart you should avoid exposure to the considerably overbought indices - as the risks are simply far too high.

Likewise, on the flip side, with zero interest rates and the fact that Bernanke has added so much liquidity recently, he, as one of the most powerful financial men in the world is attempting to melt the US stock market - up.

Essentially, this is also a hidden message to warn anyone who dares to short stocks or the index. Another stock market implosion is not what Mr. Bernanke wants right now. He sees the world, and particularly the USA in rose colored inflation glasses.

So currently, the only way to be short stocks at present is with a dangerous swing trade (since the trend is still up and has not reversed - yet). Again, this makes the equity markets even more precarious, given that Mr. Bernanke and his close friends on Wall Street appear to be intervening in the markets. Today's sharp gap up at the open of trading, was another clue that market intervention by the PPT is alive and well. Yet, if they keep this up much longer, investors may soon have to rename Wall Street to Fraud Street.

Ask When and Why an Opening GAP Should Occur?

Back in the old days when equity markets were actually honest, not manipulated by our governments, and it was a far more level playing field, it was extremely rare that one ever saw an opening gap in a stock. Now there are hundreds - daily.

Generally, in the past, in order for the pro, or market maker, to GAP a stock up at the open of trading in the morning, there had to be something very significant happening - over night.

After all, if there was no corporate news overnight that was of a material nature, and thus no significant news or order imbalance, by deliberately opening a stock higher than the previous closing price, the pro could technically carry out and cause an act of illicit stock market manipulation.

Below, is a brief sample of the exact legal words used by one Canadian Securities Regulator (BCSC) regarding this manipulative act. The words used by the SEC, or any other regulatory authority should not be substantially different, assuming of course that the spirit and intent of the Rule of Law - for all - is being upheld.

By the way, this is not a unique problem in the USA, as these legal words and equivalent acts of manipulation are equally laughable in Canada, whereby when it comes to white-collar stock market crime and stock manipulation, Canadian regulation and enforcement are for all intensive purposes, non-existent.

Manipulation and Fraud

A person must not, directly or indirectly, engage in or participate in conduct relating to securities or exchange contracts if the person knows, or reasonably should know, that the conduct

(a) results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a security or exchange contract, or (b) perpetrates a fraud on any person.

Yet, today at the opening of trading there were a huge number of US stocks, including many of those in the SP 500 Index - that gapped sharply higher - all on no overnight material news. Equally, there was absolutely no proof or any evidence that there was so much demand that a huge order imbalance existed to justify the opening gaps. In fact, trading volume today in most stocks was well below normal.

If stocks are thus deliberately allowed to gap up at the open of trading, without overnight news of a material nature, and without any order imbalance - than technically, it could constitute an intentional act of stock market manipulation - which essentially as a result - could perpetrate a fraud on society, and especially all those whom invest and believe markets are freely and fairly traded.

Now imagine, what would it could say or imply, if that same fraud and manipulation was in fact being carried out or conducted by a fiduciary body - who was charged to oversee and protect the general public?

The logical conclusion is yours to choose. Possibly write to your local politician and demand a truthful answer that begins with auditing the large trades at investment bankers.

Chart Truth - Spot The Trend

Stock Market Challenge - Are you a Market Wizard?

1. Astro-Sky Traders (Gann Astrology) - One of the most famous days in stock market history, was on October 19, 1987 when the stock market crashed. Is there any similarity in the Astro-Sky between October 19, 1987, and next Monday December 13, 2010. If so what is the similarity?

2. Market Geometry Traders - The Gann Box shown on the last chart today (SP 500 Index daily) suggests a near completion. Given the SP 500 Index April 26, 2010 high was about 225 days ago (time); what is the significance now, of a market move of (about) 225 SP 500 Index points (price) down, and essentially, then back up again in (about) 225 days?

Please note that there will be no formal answers given on our blog. However, it would be a nice idea to share your thoughts with each other via comments.

James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom