Jun 30, 2015
Long term update
Something to read with a lot of charts if you have time and you are bored:) This is what I see for the long term. Here it is what I think is going on - stocks deep correction to begin in autumn and accelerate in 2016, bonds will continue to sell off, FED will raise rates and liquidity will dry up. Like in 2008 all assets will start moving lower because the most wanted asset will be USD and everything else will be sold off. The CBs will freak out and make something crazy. They must safe the bond market the stock market is a side effect... the bank cartel will not give up so easy and it will try to safe the system at any cost. This will cause inflation phase, real bubble in most asset classes - bonds final move higher(rates lower) should begin, stock final bubble phase, precious metals much higher wealth preservation... and the USD will be thrown under the bus multi year decline will begin. This will work for a while until all start falling apart and natural forces win. I am paying more attention to gold, because commodities and miners stocks should outperform and I think this is were you have to jump when we see the final bubble. Stocks will make nice gains too, but I expect miners x5 to x10 times higher. I think we are in the eye of the storm, it is calm for very long time especially the last 7 months, but it think this will change after the summer and crazy ride is upon us in the next several years. - STOCKS Distribution is running for a long time, the EW patterns are finishing, the long term cycles look ready to roll over, market breadth long term divergences... the stock market looks ready for a correction after several years only up... up... up. There is two scenarios - this is the top of the bull market or deep correction followed by another move higher. EW and indicators can not give us definitive answer, the long term 9 years cycle is right translated and another high will fir better. I think the central banks will try to save the system and we will see one final hurray... Long term cycles SP500 - correction to finish the current 7 year cycle. I expect the breakout to be tested and bubbles, bubbles flying everywhere.... As I wrote I think since November 2014 a correction is running and I was surprised a few weeks later to see for the first time descent EW and cycle analyses from David Chapman which confirms my view. It is worth to read the article. Now there is different options, but I compare the price action for gold in Euro and add cycle analysis. Taking in account this factors I think the most probable scenario is a rally higher in autumn and another move lower before major low. For trading it does not matter even with the more bearish scenario there should be a rally so precious metals are a buy late July early August. Even if I am wrong you will make more money, so who cares:) I think this chart is a very important clue - clear impulse followed by three waves higher, three waves lower with lower low and impulse higher.... what should I say clear corrective pattern expanded flat. After impulse and corrective pattern another impulse lower follows.