Japan is Back!

On Wednesday, September 25, 2013, Japanese Prime Minister Shinzo Abe, known for the unprecedented buying of Japanese government bonds by the Bank of Japan (BOJ), rang the closing bell of the New York Stock Exchange (NYSE), with a banner behind him that read "JAPAN is BACK. Invest in JAPAN. This comes after a historic rally in the Nikkei 225 stock index since the October 28, 2008 low of 6,994.90. One didn't see this type of sentiment in association with the low in the Nikkei 225 in October 2008. It was a time of fear and panic. Now everybody knows why the BOJ will be able to hold up the Japanese Economy. This is how markets work. They give everybody all the right reasons to do the wrong thing at each major turn. In my view, this appearance by Japanese Prime Minister Abe is a perfect contrary indicator, and exactly what one should expect to see at the top of a bear market rally. The index topped in its counter-trend rally on May 23, 2013 and this appearance of the Japanese Prime Minister with his optimistic outlook is associated with a lower high in the index, as is the entire rally itself off of the October 2008 low. The Nikkei 225 should continue on to move well below the October 2008 low in its now 24-year bear market.

                                        

Ray Dalio explains how the economic machine works

In this simple, easy to understand illustration by hedge fund manager Ray Dalio, the economic and debt cycles are explained in layman's terms, so that even those just beginning to learn economics can understand how the economy works in a nutshell. One especially important distinction Mr. Dalio makes is the difference between money and credit, and how most of our "money" is actually credit (debt), even though it is referred to as money, as if it were currency. This is a point I have been hammering over and over, and well illustrated by Ray Dalio. Enjoy.

September 20, 2013 Interview with Tim Wood

In this Friday, September 20, 2013 interview we
discuss markets, manipulation, and  the coming deflation.


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Possible 2011 Fractal

We have a possible fractal pattern occurring in the stock market. 2011 saw a top in February, 3 waves down into March, 3 waves up into May, and then a five-wave impulse down to complete the expanded flat correction. We have may the same thing occurring this year, from May to whenever this move down completes. This is only a possibility, and could very well fit into a larger corrective count from 2009. At the bottom of this post I also show a possible Elliott Wave Count from the March 2009 lows, which would be a double zigzag, labeled W-X-Y, with wave X in 2011 being an expanded flat as I show below. This would be a better fit than my previous count of just Primary A-B-C in that it conforms better to the rules and guidelines of  the Elliott Wave Principle. Should this count be correct, it would imply a move down to complete minor wave 4 and then one more uptrend for minor wave 5 of intermediate wave (C) of Primary wave Y and cycle wave b of the supercycle wave (a) bear market.

                                           2011:

                                         2013:


                                 

                                       Elliott Wave Count from March 2009:


                                  

Greg Hunter interviews Karl Denninger

Excellent interview with Karl Denninger of www.market-ticker.org. I concur with everything Mr. Denninger has said here. Once we get the setup to cap this rally, it will really be a sight to behold.

                                                     

Max Keiser interviews Robert Prechter

Excellent interview between Max Keiser of the Keiser Report and Robert Prechter of Elliott Wave International on August 10, 2013. I hope readers of this blog are heeding these warnings. It is not too late to act to get safe.

September 13, 2013 Interview with Tim Wood

Summer is over, and volatility is likely to return in a big way as traders return from vacation. Volatility is also, in my opinion, likely to stay for the rest of this bear market rally, and take off to the upside in a big way when the bear market returns. The state of the markets is extremely dangerous, and I believe we are getting close to the top of this bear market rally, but we are not quite there yet. In this interview, we discuss the big picture with respect to the stock market and economy, and much more. I must also give credit to Bob Prechter and the folks at Elliott Wave International for their incredible insight that has allowed me to view the markets and economy from the perspective that I do.

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Long-term Alternate Elliott Wave Count

Although I believe the balance of the evidence suggests the U.S. Stock Market has been in a bear market since 2000, and therefore 2000 was the orthodox top of the great bull market, as Elliott Wave Analysts, we must always entertain alternatives. That is, that the move down from 2007-2009 was only 3 waves instead of an impulsive 5. If this were the case, it would let 2002 mark the low of Primary Wave 4, and 2007 the end of Primary Wave 5, Cycle wave V and Supercycle wave (V). We would now have an expanded flat from 2007 taking shape, with 3 primary degree waves down from October 2007-March 2009, to complete cycle wave a and 3  primary waves up from 2009, culminating in a final top to this bear market rally, cycle wave b. We would then have 5 Primary waves down to complete cycle wave c and Supercycle Wave (a) of Grand Supercycle Wave IV.

 

A Possible Projection:

Just to reiterate, my Primary long-term Elliott Wave Count (Bull Market top in 2000):

Regardless of which count is correct, the Secular Bull Cycle that began at the 1982 low ended in 2000, no two ways about it. Additionally, 9 years is too short to end that secular cycle. Historically, they last 16-20 years, and given the stretched nature of the 4-year cycles since the 2002 low, I would not be surprised to see this secular cycle last into the early 2020's. The price low, what I believe is Supercycle wave (a), of the secular bear market, will likely arrive this decade, however the secular bear cycle itself will not end until a secondary low is made, similar to 1982.

Tim Wood Interviews John Grant September 6, 2013

Excellent Interview with Tim Wood of Cycles News and Views and John Grant of Grant Financial Group on Friday, September 6, 2013.

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