Generational Dynamics Forum - New Site

vincecate wrote:US market off about 2% Sunday night pre-market.

Monday night I see it down by 2.5% in after-hours trading.

http://money.cnn.com/data/premarket

aedens wrote:I wish to be wrong on this chart...

augustdollar.png

http://xa.yimg.com/kq/groups/17324418/1 ... _Rev_B.pdf

I'm also picking up dates in this zone. May to July 2013 preliminary.

The classic cyclic economic view, which can be duplicated by running an FFT on closing market values or quarterly GDP or pretty much anything is that there are three signals, long wave, medium and short, plus the fairly irregular 42 month "cycle" that some call noise. Myself, I think of the short term as a regenerative feedback circuit that sometimes breaks into oscillation, and is no longer effective. As markets undergo more and more rapid swings with more peaks and lows in a given period, you are getting the warning of oscillation about to happen, and when it starts, that part of the "signal" is effectively no longer part of the market, there is no amplification, so you have free fall to the point where the other signals support. And when it picks back up, the amplification is at a lower level, and slowly gets adjusted upwards over time till the oscillation breaks in again.

Just my own mental picture, not perfect by any means, but just the way I think about it.

Since most small to moderate profits tend to vanish, the market teaches you to cash them in before they get away. Since the market spends more time in consolidations than in trends, it teaches you to buy dips and sell rallies. Since the market trades through the same prices again and again and seems, if only you wait long enough, to return to prices it has visited before, it teaches you to hold on to bad trades. The market likes to lull you into the false security of high success rate techniques, which often lose disastrously in the long run. The general idea is that what works most of the time is nearly the opposite of what works in the long run.

http://olesiafx.com/economics/day-200801-19.html

Jesse Livermore, one of the greatest speculators of all time, reportedly said
that, in the long run, you can't ever win trading markets.

http://books.google.com/books?id=DjtVXp ... 22&f=false

Advanced economies worldwide increased their debt burden from $18.1 trillion in 2007 to $29.5 trillion in 2011, according to researchers at the Brookings Institution. And that's not the half of it. The number is projected to grow to $41.3 trillion by 2016.

We are clearly in a deflationary spiral in the world with more money being lost than created, even with QEx. Just yesterday over $1.5 Trillion dollars was lost and $4T from July.

We're now in the third cyclical bear market of this secualr bear market.

At this point, given the market action (a 4% down day is a good tell, these days), one of two things is going to happen.

1) The stock market will experience a true crash.

2) The stock market will put in it's first short term bear market bottom somewhere between were we are now and S&P 1050 and initiate it's first bear market rally (weeks to a few months), killing the shorts, and then, when that's finished, initiate it's second down leg of this bear market.

I expect that we will get #2.

I sold my short funds on Friday. So far, I've made up about half of what I lost (on paper) during QE II.

For trading purposes, I'm going to nix the idea of a late August acceleration in the panic and guess that was seen yesterday.

In May 1931, stocks had been declining prior to the Credit Anstalt bankruptcy and there was a final flush for a few days thereafter, followed by a 5 week rally. Then financial condtions worsened in September.

A simliar scenario might result in a rally toward early September with worsening conditions in November.

Not really a prediction but if it happens I might try going short again in early September. A late August panic could involve shorts throwing in the towel.

Higgenbotham wrote: http://xa.yimg.com/kq/groups/17324418/1 ... _Rev_B.pdf

I'm also picking up dates in this zone. May to July 2013 preliminary.

Interesting... I arrived at a mid-2013 in that range as well simply by looking at a 15 year DOW chart (1996-Present) where a massive 6000 pt Head & Shoulders pattern is forming with ~7-8000 as the neckline. Given the time scale it will be about that long (trending down) to complete the Right shoulder. Of course if that happens, we'll get that DOW 3000 range John has been prophesying as the downside target very soon after.

xakzen wrote:

Higgenbotham wrote: I'm also picking up dates in this zone. May to July 2013 preliminary.

Interesting... I arrived at a mid-2013 in that range as well...

Fed: Low rates to stay till at least mid-2013 (released this afternoon - link below)


http://csiwallstreet.com/august-2011.htm

"A late August panic could involve shorts throwing in the towel." (my words, not his)

Fed watchers will be looking for hints of a stronger easing move in Bernanke’s next speech on Aug. 26 at the central bank’s policy retreat in Jackson Hole, Wyo. (same article - link below)


The goal posts are up. The game begins.
http://www.marketwatch.com/story/fed-lo ... =afterbell