Tim Wood Interviews Chris Wilson

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DOW Weekly Rising Wedge

Below I illustrate the rising wedge form the market has taken since the rally began in 2009, with throw-overs and throw-unders. This volatility simply serves to illustrate the intense emotion in the market. And, the final move up is likely to be another throw-over, before a massive reversal to the downside and a resumption of the larger bear market.

A Major Shift in the Bond Market and Interest Rates

Recent data and evidence suggests, in my opinion, that long-term interest rates have bottomed, after a 31 year bear market, and a new bull market in rates has begun. By the same token, if in fact long-term interest rates have bottomed, a new bear market in bonds has begun. However, while most who agree that rates have bottomed will say this is because of a growing economy or rising inflation expectations, I think it is because of a growing fear of default. This shift in psychology is indicative of the onset of the biggest credit collapse in history. The Bond market, stocks and precious metals have been the last holdouts of this massive credit bubble. Now let's take a quick look at each. Precious Metals topped in April 2011 (Silver) and September 2011 (Gold). Gold has now broken down and confirmed a bear market, while silver has collapsed as well. The last holdout was U.S. Government Bonds, which topped in June 2012 (10-year note). Now, we are starting to see evidence of further stress with the recent bankruptcy of Detroit, Michigan. This is one of the first of the coming massive wave of municipal defaults and bankruptcies. Other notable municipal bankruptcies so far have been Central Falls, Rhode Island and Stockton, California. In reality, most municipalities are bankrupt, even if not officially yet, for the continuation of this debt ponzi scheme requires ever increasing amounts of debt issuance, and if municipalities have trouble issuing new debt, they go bankrupt. Such is the inevitable outcome of the largest ponzi scheme is world history. Back to the U.S. Bond Market. Below please find an Elliott Wave count in interest rates (inverse to bond prices) dating from to the top in rates in 1981 to the low in June 2012. The new Bull Market in rates should continue for decades.

July 26, 2013 Interview with Tim Wood

In this interview, we discuss the herding impulse inherent in human beings,  how this manifests itself in financial markets, the extremely dangerous state of the markets, and much more.

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The most important turn in U.S. stock market history

Back in 1978, Elliott Wave Principle by A.J. Frost and Robert Prechter, Jr. predicted a mania to occur comprising Cycle Wave V of Supercycle Wave (V) of Grand Supercycle Wave III. Needless to say, this has proven correct. And, It has taken much longer than expected to top. And yet, here we are, thirteen years after the orthodox high in the Dow Jones Industrial Average, with the nominal Dow at all-time highs, complacency everywhere and what could very well be the most important juncture in U.S. stock market history about to come to fruition. In their book, Frost and Prechter forecast,  "...in order to set up the U.S. stock market to experience the greatest crash in its history, which, according to the Wave Principle, is due to follow wave V, investor mass psychology should reach manic proportions, with elements of 1929, 1968 and 1973 all operating together and, at the end, to an even greater extreme." Little did Elliott Wave Practitioners know the extent to which this statement would become true. The length of time the nominal stock market averages have spent levitating the past 13 years after the true high in stocks (Dow/Gold) has been nothing short of astounding considering the loss of real value that has occurred since that time. The implications of such a manic and parabolic rise in the 1980's and 1990's have not changed, and the fact that it has taken so long to top out makes the situation that much more dangerous. While we wait for the market to finally top out in this last and final peak in the decade-plus long topping process, please find below an Elliott Wave Count I consider to be a reasonably high probability. While conditions are again getting ripe for a top, I think the odds favor a moderate pullback for intermediate wave (4) and then one more final high, in intermediate wave (5) of Primary Wave C of cycle wave b to reach (and perhaps throw-over) the upper trendline of the broadening top formation the market has illustrated, on a monthly basis.

June 28, 2013 Interview with Tim Wood

In this interview, we discuss common investor misconceptions and biases, how these can be dangerous, and how to overcome them to improve overall performance. We use Gold as a prime example of how biases  and pre-conceived notions can get one in trouble when trying to discern the direction of a market from the so-called "fundamentals".

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May 3, 2013 Interview with Tim Wood

Another discussion between myself and Tim Wood regarding the extreme bullish sentiment in the markets, as well as a dire warning to investors. We are in a secular bear market bigger than any in U.S. Stock Market History. The worst is NOT over, and once we get the proper setup in place, the entire house of cards will come collapsing down. We hope you are listening.

The Interview can be found by clicking here