Friday, April 16, 2010

The Start of Something [A LIttle] Bigger?

Today should mark the start of a more significant decline in the broad stock markts that should erase 1/3 to 2/3 of the rally up from Feb 5, before making a final leg up to complete the larger degree bear market rally from March 2009.


As I have discussed many times before, the "hope" mentality of previous major market tops will be no less apparent in this move - It will usher in the next major leg down in stocks and other assets.  To underscore that thought, I re-iterate that deflation is the far more worrisome (in terms of real likelihood) scenario in the not-too-distant future, despite CNBC's latest batch of yammering stock-monkeys carrying on about inflation every single day.

The ratio of surveyed bears on the Investor's Intelligence Survey is extremely low (<20%), a rate that generally coincicedes with at least minor market tops.


Another major bearish indicator is the put/call volume ratio, which plummeted to an astronomically low 0.50.  Investors are betting in a huge way on future continuation of a major bull market - they will be sorely dissapointed as this minor correction and final leg-up sucks in as many committed players as possible.



Silver appears to be definitively in a long-term bear market at this point than gold, and has at least one major leg down in price ahead that should take it well below $14.00 - My longer-term target for my favorite metal is still below $8.00.


A break down from this wedge formation and a close below the $16.30 mark will indicate that the next large bear move in silver is underway.

Stay sharp out there!  Today's drop took many committed investors and traders by surprise and should continue to do so for at least a few weeks.

Derek.

24 comments:

  1. It is time to legalize marijuana already.

    Seriously.

    I mean come on.

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  2. What, no mention of Goldman Sachs accused by SEC of fraud.

    Now it has to be really bad for them to have made this open accusation against such a powerful, head of the mafia (no, not the hollywood scillian variety) banker brotherhood.

    It should be a warning of market direction for us all. It means that there is enough sh*t waiting in the wings for them to send this market way down quick, or slow, when, required.

    It all depends how it fits in to the over all plan. You know, that one that so many of you believe does not exist, and that everything just happens by chance.

    Of course they will wriggle out of it. No one will go to prison, some insignicant down the scale fall guy will take the blame (for a pre-arranged fee).

    It's significance is to let us know that there is more to come eventually and that will be released as and when required.

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  3. What, no mention of Goldman Sachs accused by SEC of fraud.

    Now it has to be really bad for them to have made this open accusation against such a powerful, head of the mafia (no, not the hollywood scillian variety) banker brotherhood.

    It should be a warning of market direction for us all. It means that there is enough sh*t waiting in the wings for them to send this market way
    down, when required

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  4. Sorry about that. Don't know what happened

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  5. Ray,

    I wrote about Goldman Sachs about 5 months ago, and one of the things I said was the the Goldman Sachs Era (and the era of many other "powerful" financial houses in the US) is coming to a close.

    Not only will there be a plethora of numerous ponzi schemes exposed during the next bear market leg, but the attitude towards investment in stocks in general will become one of generational pessimism.

    Markets do not function in terms of cause and effect, the broadest markets are a collective of sentiment and people trying to place a cause/reason/justification on an investment decision they were already going to make.

    If you look at the daily traded volume of financial markets in the US, it is multitudes higher in dollar terms that its GDP as a nation (Another stark indicator that optimism towards financial assets is historically much too high). Too claim that any financial institution is capable of manipulating markets except on a minute scale is erroneous at best.

    This was attempted during the Great Depression, where a coalition of major bankers attempted to prop up the markets by buying long futures and long index shares. The result was that the vast majority of these instutions went bankrupt as a direct result of their "manipulation" - and the charts show just how successful they were.

    It will be the same for any who attempt to do it this time around.

    Have a great weekend!

    Derek.

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  6. Hi Derek,

    I guess I was not visiting your site at that time. However, I was mostly referring to lack of comment re the 'cause' attributed to the market fall yesterday, and the now intervention of the SEC.

    However, I have to challenge your comment -

    "...Markets do not function in terms of cause and effect, the broadest markets are a collective of sentiment and people trying to place a cause/reason/justification on an investment decision they were already going to make....."

    Everything, and I mean everything that happens is as a result of cause and effect. All you are using to support your comments. Derek, is that people for various reasons - naivety,ulterior motive, delusion, whatever put forward their version of the cause.

    Even your explanation is YOUR version of the 'cause' - n'est ce pas?
    For every action there is reaction Newtonian physics. For every cause there is an effect.

    But I was always add 'this Newtonian' (me) law'. For every effect, there is an affect. And it is the 'affect' which is of greatest concern.

    To explain. Rising price is usually the result of inflating the money supply (cause and effect)

    However, if one's income increases accordingly, the 'affect' of the 'effect' is not particularly negative to the mass. This is why people (the mass) will push for higher wages. ( a cause that will create further effects and affects.

    This is the delicate period we are going through now. It is the 'establishment's manipulation of the system trying to avoid the 'affects' to the mass and thereby causing excessive unrest, which is delaying the remedies that need to be
    taken in order to bring about more economic stability. You try to correct one, and cause another.

    Knowing this is helping me to make money, in this period where only speculation appears to rule
    in the markets.

    Speculation has to be supported by 'awareness' of what is really going on. This comes from acute, free thinking, well reasoned, observation, and a good knowledge of history. Otherwise one is gambling pure and simple.

    Nothing is 100%, but here, it is the best one can hope for

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  7. Incidentally, Derek, I was tempted to take up your comments on manipulation, along with your references to the so called 'Great Depression[.

    I have seen your argument so many times.

    All I will say at this stage is that there is manipulation, and manipulation. It can be applied in many ways. Here again we come back to cause and effect.

    what is erroneous is that the masses see things through their own eyes and interests.

    The 'masonic order' is not the head factotum behind any 'new world order' referred to by a number of world leaders including the past US president. (So it is no secret)

    However, you will find that most, if not all, world political, business, and that includes the financial institutions, leaders of any consequence are masons. (coincidence? Of course}

    They tell you in their 'club motto' at 33rd degree level 'Ordo ab chao' Order out of chaos. That means that in order to bring order, you must first create the chaos. As our meerkat TV advert says - SIMPLES!

    (incidentally, that 33trd degree level is way apart from your amiable Uncle Joe's level now, or ever.)

    Don't anyone get on to me, I didn't make up that motto. But I listen when they tell me what their intentions are, and how they will go about them.

    That's our difference, I do, you don't
    Again - 'Simples!'

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  8. Let me explain, one cannot hear, and comprehend what is being told us by the real movers and shakers if one doesn't believe they exist.

    There is lots of good solid information
    out there, and quite visible because actions speak far louder than words, that even 'analysts' do not see, or if they do, they are reluctant
    to tell us for various reasons.

    I am convinced that even if they took a site in Times Square and announced their intentions on a large neon sign, it would be missed, or ignored, by most.

    So conditioned are the masses to see things only one way.

    Never accuse the 'Elite' of being secretive in their intentions. Just go see a mental optician in the hope that there is a cure for one's mental glaucoma.

    There is no greater feeling of the relief when the enlightenment reveals
    all that has been hidden only by the 'vision' impairment.

    And it is amazing how your trips into the market will gradually become more fruitful.

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  9. How is the new website coming along Derek?

    ReplyDelete
  10. Kiley,

    We are just working out some stuff with our merchant provider and getting the registered user interface up to snuff.

    As always with such things there are snags along the way so we are ironing out the difficulties. It should be up soon.

    Derek.

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  11. Well, the volcanic cloud from Iceland still looms over most of Europe. It has closed most airports for days, and will possibly last one or two more.

    Watch the airlines in the markets. Many were already dodgy in their finances. This is going to be a last straw for some. It could result in more
    amalgamations as well as going out of business.

    It will hit many other allied businesses that were shaky.

    Amazing how little Iceland has been inflicting so much damage beyond its borders recently.

    We are in for quite a year. I am also feeling something big is brewing.

    But for every action there is a reaction, and for every crisis there is an opportunity. That's life.

    Ever wondered what bird brain was able to arrange that all those important Polish government dignitaries should fly on one plane? I mean ALL ON ONE PLANE and to RUSSIA on a RUSSIAN PLANE!

    The irony of it all is that the reason they were flying to Russia was to a ceremony in honour of the Katrin massacre of so many Polish intelligentsia, including army officers during the war by Russia that Russia had tried to blame on the Germans.

    It defies belief.

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  12. RN - no one reads your ramblings. You either post here just to see your "name" on the internet, or to derive a sad sort of pleasure from annoying anonymous folks.

    ReplyDelete
  13. "....Anonymous said...
    RN - no one reads your ramblings. You either post here just to see your "name" on the internet, or to derive a sad sort of pleasure from annoying anonymous folks........"

    Thank you for reading my post I am pleased you found it interesting enough to comment so favourably.
    Have a nice day

    ReplyDelete
  14. RN,why don't you start your own blog? i'm tired of reading your bullshit!(stupid limey basturd)

    ReplyDelete
  15. Stock Mkt manipulation aside.

    The Gld/Slvr mkts definitely are.........
    Anyone who thinks JPM, doesn'tscrew the Slvr Mkts around I have swampland.

    Also, was a TAD (no really a lot),conspicuous of last Friday's Metal Drop...just so happened on Expiry date?.

    As for the GS deal, IF the entire can of worms comes out(it won't IMHO), it would totally destroy the (what's left) economies & Mkts around the Globe.

    They cannot and will not let that happen......slap on the wrist, from the SEC.
    The lawsuits, will be settled QUIETLY.

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  16. Global interest rate scam (China and Vancouver will collapse as USA did in Great Depression):

    http://goldwetrust.up-with.com/economics-f4/inflation-or-deflation-t9-360.htm#2943

    Southern USA to end up as drug-war zone:

    http://goldwetrust.up-with.com/economics-f4/changing-world-order-t32-60.htm#2942

    ReplyDelete
  17. Can you block Ray Newton? If so, please do.

    ReplyDelete
  18. If you value the integrity of this site,
    How about blocking these mindless, annoying, uncalled for attacks on a poster, by this fouled mouth, bigoted, 'Anonymous'

    Personal attacks are not permitted on any other website I know.

    G

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  19. Thanks Gerry, but he can'r help it. Bigotry is a malignant disease.

    There was a man a few years ago who tried to tell the people what they should and should not read. He was called Adolph and he even had the published books banned and burned of those he didn't like.

    Well, we all know what happened to him.

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  20. This crisis caused by the erupting Icelandic volcano bringing airports all over Europe to a standstill will provide excuses for many businesses in a few months time when the costs filter through - hundreds of millions a day.

    It will help to get 'cost cutting' labour reduction or as they say now 'downsizing' accepted to help them survive. As they say, 'it's an ill wind.....'

    Probably all hit about September/October time which is the traditional riming period for sharp declines.

    Just mention one more instance of how they get their message across at every opportunity.

    They have been sending up 'test flights' by large airliners minus passengers, of course, to test the effects of the atmosphere.

    The aircraft was shown on the ground with the camera lingering on the side of the craft on which was emblazoned in HUGE Black letters - member of 'ONE WORLD'

    We either get the message, or we don't.

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  21. Terry, Jerry, and now Gerry. Where is Tom & ?erry?

    ReplyDelete
  22. Poland's leaders refused H1N1 and thus were executed

    http://goldwetrust.up-with.com/economics-f4/changing-world-order-t32-75.htm#2944

    ReplyDelete
  23. Derek,

    There is another way to draw the channel on the silver chart with parallel lines (no wedge).

    -Shelby

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  24. Derek,

    You're wrong again about the DJIA. Friday was just a blip. GS will come out smelling like a rose.

    ReplyDelete