October 25, 2013 Interview with Tim Wood and Bill Still

In this interview, we had the privilege of having a very special guest, Bill Still. I have posted on this blog before about Bill. Mr. Still is an writer, director and monetary reformist. He understands the fundamental problem with the system: the fact that all of our money is based on an interest-bearing debt. Until we as a nation realize this essential fact, and get down to the roots of the problem, nothing will change. There is a revolution coming to this country, and around the world, when we all finally wake up to this scam that has plagued the world monetary system for 100 years. It is my pleasure to welcome Bill Still.

            Click Here to Listen

Market Update

Minor wave 4 has played out as expected, as an expanded flat. However, what has transpired is a variation of an expanded flat called a running flat (see Elliott Wave Principle, p.48). Now, what happens next is key. We have a Dow Theory non-confirmation in place, where the Dow Transports have made a new high, and the Industrials have not confirmed. This sets the market up to trigger a Dow Theory Bearish Primary Trend Change, if we get a move of both averages below the previous secondary low point. Although the last secondary low points are up for debate. A close below the June 2013 lows in the Industrials and the Transports should seal the deal on a Dow Theory bearish primary trend change. The corresponding levels to watch, on a closing basis, are 14,659.56 on the Industrials, and 5,990.79 on the Transports. It will then be the move up out of the next secondary low point, that will either re-confirm the current non-confirmation, or negate it. A close on the Industrials above 15,676.94 will negate the current Dow Theory non-confirmation.

Dow Jones Transportation Average:

Dow Jones Industrial Average:

Now, from an Elliott Wave perspective, should the current non-confirmation hold, meaning the Industrials do not move above 15,676.94 on a closing basis, it could be indicative of a fifth wave truncation (failure), where the fifth wave fails to move above the high of the third wave. Now, this is where it gets a bit tricky. The intraday high of minor wave 3 is 15,542.40, but the closing high is 15,409.39. On Tuesday, October 22, 2013, the Industrials closed at 15,467.66, above the May 22, 2013 minor wave 3 high at 15,409.39. R.N. Elliott used closing prices, so on a closing basis, using this wave count, minor wave 5 has moved above the high of minor wave 3. On an intraday basis, however, it has failed to do so.

There is also another potential alternate count I am considering which suggests the August 28, 2013 low of 14,760.41 marked the end of minor wave 4, and the move to 15,709.58 on September 18, 2013 marked the high of minor wave 5, intermediate wave (C), primary wave Y, cycle wave b, and thus the bear market rally itself. Please see illustration below:

Due to the new high on the S&P 500, I favor the below count. The only aspect of this count that is less than ideal is the fact that a running flat is normally indicative of underlying strength in the larger trend, and thus would not favor a fifth wave truncation. But, nothing is written in stone that says the fifth wave has to truncate, or that it can't. We just have to let the market show it's hand and show us which one of these counts is correct, if either of them. Remember, Elliott Wave Analysis is all about probabilities, not certainties.



                          

In summary. This bear market rally that started in March 2009 is getting very aged and thus extreme caution is warranted for the violent reversal and the start of cycle wave c down, the most destructive leg of the bear market to date, and the final decline in this supercycle wave (a) bear market.

Tim Wood Interviews John Grant 10/18/2013

Click Here to Listen

An Elliott Wave Projection and Warning

In a previous post I updated my preferred Elliott Wave count for the Dow Jones Industrial Average. Below please find an Elliott Wave Projection I have made. Upon completing this expanded flat correction for minor wave 4, we should move up one more time in minor wave 5, to complete intermediate wave (C), primary wave Y, and cycle wave b. Cycle wave c down will then ensue, and it is going to be a sight to behold. I am warning, when this market tops it's going to be a VIOLENT reversal. When cycle wave c down gains momentum, it is going to be absolute financial hell. I hope you are listening, and act now to get safe before it's too late. Please do not hesitate to contact me if you are unsure of what to do.

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.


                                                       Click Here To Listen