Nasdaq – No Bubble Yet
Nasdaq has a nice steady climb higher, with price staying modestly above the 200 week moving average. No sign of the spike indicative of a bubble yet.
PERMA BEARS BEWARE
For the last 6 years I’ve listened as the bear sites talk down the economy. I have to say this is the most ridiculous nonsense I’ve ever heard. Do these people even bother to go outside and see what’s happening?
For the last two months I’ve been on vacation touring a big swath of the western United States and I can tell you that in every single town I’ve gone through there are help wanted signs in virtually every window. Big towns and little towns, the story is the same. The economy is accelerating, if not booming.
I predicted this would happen over a year ago. When everyone was quoting the shadow stats nonsense of 20% unemployment, I was saying at the time it was crap. If you think the government fudges the numbers, John Williams at Shadow Stats is 10 times worse than the government ever thought about being. Let’s face it, bearish news sells. And these sites are not in the least bit interested in publishing the facts. They are interested in creating attention by continuously predicting the end of the world.
I anticipated that we would get multi-year cycle lows in everything this year, and that’s what happened. The economy didn’t turn down on any ridiculous 8.6 year economic cycle. If anything it turned up. We don’t have, and are not going to have deflation. It’s virtually impossible to have deflation in a purely fiat monetary system as long as central banks are willing to expand the monetary base indefinitely. Is it any wonder why these people continue to scratch their heads and wonder why oil isn’t going down driven by the “fundamentals”. Duh catch a clue, the fundamentals have already reversed. The market has already looked into the future and seen that the global economy is accelerating again, and demand is going to overwhelm supply by next year. Folks quit looking in the rear view mirror.
When everyone was predicting the US Dollar was going to 110 or 120 I was one of the very few who noticed that the August 2015 low had dropped below the March 2015 low. Then the May low this year the dollar dropped below the August low. That set off all kinds of warning bells. The dollar was making lower intermediate lows. If the dollar was going to 110 or 120 then it had no business making lower intermediate lows. Something was wrong. I’ll tell you what was wrong. The dollar had started a bear market with a classic double top, and the euro a bull market with a classic double bottom. Again, you have to pay attention to what is actually happening. Quit listening to these analysts that sound convincing but clearly have no clue what is going on. The euro is not collapsing and Europe is not falling apart. Quite the opposite, Europe is coming out of recession and the entire global economy is going to rebound in the years ahead.
When everyone was calling for a bear market in the stock market, I was one of the few calling for new highs. There is just no way stocks can enter a bear market without the economy rolling over into recession, and clearly the US was not even close to a recession. And just as I predicted the market recovered and now we have a breakout to new highs.
This is exactly what should happen during an inflationary phase, and make no mistake we are entering an inflationary phase over the next 4-5 years as all the global QE comes back to bite us in the ass. Seriously, did anyone really think that the world could just print trillions and trillions of currency units and nothing bad would happen? Or that it would somehow create deflation?
Sometimes I wonder if there is any commonsense left in the world.
Deflation: what a joke!
We are having one of the best years in a long long time, because I correctly anticipated that we were starting an inflationary phase. Folks, it’s time to tune out the perma bear nonsense and get on board with reality. And the reality for the next several years is that printing trillions and trillions of currency units is going to create inflation in virtually all asset classes.
Gold Nearing a Daily Cycle High
As the dollar makes its final drop down into its daily cycle low, gold could test the 1381-1391 zone. But don’t expect a break out just yet. Gold will probably drop back down into the range for a couple more weeks before the next leg up begins.
Dollar Nearing Bear Market Recognition Moment
The dollar is getting closer and closer to that recognition moment when the market realizes that a bear market has begun. It’s now making lower highs and lower lows. The next step will be to break the intermediate uptrend line. After that will come a break of support at 92. That should usher in some kind of waterfall event as all the trapped longs finally understand that the fundamentals are not bullish for the US Dollar. After printing literally trillions of them over the last 6 years I have no idea how anyone could – with a straight face – say the fundamentals are bullish. There has to be consequences to the Fed’s insane QE programs.
Oil has Confirmed an Intermediate Bottom
Oil sliced right through the intermediate down trend line today on its first try, confirming that the intermediate cycle low is complete. I don’t expect the next intermediate degree top for at least another 12-16 weeks. The previous intermediate cycle rallied 17 weeks before topping.
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This offer has expired. You can still get in but the trade guarantee will be based on my entry price today. If you join and take the trade tomorrow or Friday, you could get a better or worse entry price.
Potential Runaway Move
Over the last 7 years I’ve repeatedly warned that we no longer have free markets. Governments figured out in 2011 that if they could artificially inflate the stock market they could delay the normal business cycle. This ushered in a new age of market manipulation. Anyone who doesn’t factor this into their analysis is going to sorely under perform or lose money.
Now the Nasdaq is at a crossroads. In a natural market there is no way the index breaks through the all-time highs on its first try. It’s simply way too late in the daily cycle and sentiment is way too optimistic. In a natural market we would experience a profit taking event at this juncture.
But if the powers that be want to prevent that natural correction,m the easiest way to do it would be to manufacture a breakout right here and abort the natural profit taking even that should occur. This would have the potential to create a runaway move into the elections. We should know in another day or two if this is happening.
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