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World Stock market indexes: 2008 postings

Updated June 27, 2008

June 27, 2008 we have seen more downward pressure and the long term outlook remains negative. Extremely dangerous is that all the actual downward momentum is happening without any noticeable upwards pressure of interest rates. However, we come close to a point where the general level of interest will  rise.  As explained by Ludwig von Mises, there is no other solution. Once interest rates start to rise, they will break the back of what is left of the Real Estate, Stock and Bond markets. Be aware that few investment vehicles are able to withstand and even rise in conjunction with higher interest rates. High time to find out which ones are.

The Dow made a peak in 1966. It made little progress for about 15 years, so that in 1980 it was just about where it was in 1966, roughly around 1,000. Gold, on the other hand, rose from a low of $35 all the way to $850. This means that strong inflation during the period kept the Dow from falling, so it did not fall as it did during the Great Depression. On the other hand, inflation powered the price of gold about 25-fold. In this scenario, we should expect the Dow to remain range-bound in the 10,000-15,000 range. Then, a gold forecast of 10,000 is perfectly realistic. Applied to the Standard and Poors-500 below, this would mean a sideward trading range from 1400 to 800 for a gold forecast of 10,000.

Updated July 15, 2008

As of July 15, it looks like all markets have entered an oversold territory and that we are about to see a B up-leg of the ABC down formation. This correction should be used wisely and we advise urgently to adjust the structure of your savings. Time to talk to somebody that really knows what he is doing. Don't be mistaken, this is a paradigm shift. Fortunes will be made and fortunes will be lost. The weakness and the late warnings issued by the financial sector tells a book. The Garage Sale ain't over yet!

As of June 26, 2008, we had a Hindenburg Omen. “The rationale behind the indicator is that, under normal conditions, either a substantial number of stocks establish new annual highs or a large number set new lows — but not both.” When both new highs and new lows are large, “it indicates the market is undergoing a period of extreme divergence — many stocks establishing new highs and many setting new lows as well. Such divergence is not usually conducive to future rising prices.

Last year, many Stock market indexes had retraced all the way to their pre 911 crash levels. Technically, we had come to a point where either they break out on the upside or come down and confirm the 2000/2001 top. Amazing is that nobody was crying ‘Wolf’ when we had landed in a position where and Double Tops and Overbought markets could ignite a fresh down leg. Fundamentally, the CREDIT CRUNCH (see under CDO’s and subprime) and the associated garage sale is far from over. As of July 16, 2008 we  have seen the confirmation that unless we enter a Weimar situation (Zimbabwe), the markets are to come down a lot more after the actual correction.


Posted September 11, 2008

The puzzle of overbought Dollars and oversold Gold starts to fall into place. Authorities will have no alternate but to massively start to monetize the Debt in a Weimar/Zimbabwe style.

This coming decline could shock mainstream analysts:

We are expecting a crash-like decline in stocks sometime over the next four to six weeks, starting at any time. Maybe now, maybe in a month, maybe two. Things are unraveling fast. Declines are five waves, and rallies are three (corrective), volume is up on declines, and shrinks on rallies, and we continue to get lower highs. What we are expecting pretty soon is lower lows. This coming equity decline should alert the Master Planners that a massive stimulus and hyperinflation policy should start yesterday, and that stimulus should be the catalyst for a turnaround in precious metals, commodities.

click here to read this very important report

Posted September 4, 2008

The Dow Jones fell through a double bottom and confirms our skepticism about the markets. Hopefully our readers have - as we advised on several occasions - used this past summer to reorganize their portfolio.

Brace for weak European and US markets over the coming next weeks.


Over the last weeks, we warned the major indexes were moving into a Bearish Rising wedge towards their long term trend lines. The bearish trendline held and today the Dow fell through a double bottom. Next objective is 10,850. However, as this

is probably the second down wave, we expect to see much lower levels!

Posted  August 15 and updated September 12, 2008

Gold, Silver, Oil, Euro and Commodities are oversold but Stock Markets and Financials start to be overbought. Both the Dow Jones industrials and the SP500 show dangerous rising wedges and falling participation. European Stock market indexes as the German DAX, French CAC, and others show similar patterns! As explained earlier, we have lower tops and lower bottoms or Secular Bear Trends for most Stock markets and stocks. Watch out as the actual up correction for most stock markets could come to an end during the coming weeks. Use the friendly markets to reposition your investments.

October 2008

The Presidential Elections and the last act - short term

Now that the Dollar is at a 12 month high, Oil, Gold & Silver and commodities are way down; the only missing part of the Election puzzle is a better looking stock market. An unexpected cut in Fed rates next Tuesday would fill the gap, propel the Dow Jones to a level of 12,200 and paint higher pre-election markets. This would postpone the next down leg of the world stock markets. Tuesday September 16, 2008 is the day to watch! With World Stock markets breaking down, the FED has not been staying ahead of the game.

The Dow had a Bearish Triangle breakdown on Monday 15/9. A violation of 10.850 will open the door to much lower levels.

October 2008

October 19, 2008 there is clear evidence that this time there are no cheering Stock markets preceding the upcoming Presidential Elections. Our prediction of just weeks ago in "CRASH" was extremely accurate.

October 2008

Russia halts trading after 17% share price fall - By Catherine Belton and Charles Clover in Moscow and Rachel Morarjee in London

Russian shares suffered their steepest one-day fall in more than a decade on Tuesday, losing up to 20 per cent, as a sharp slide in oil prices and difficult money market conditions triggered a rush to sell. The heads of the Russian central bank, the finance ministry and the financial market regulator met on Tuesday night for an emergency discussion on ways to halt the crisis. Click here for more…

November 2008

The structure of the US economy today is far weaker than it was in the fall of 1929. Years of reckless consumer borrowing and spending, and enormous trade and budget deficits have resulted in a hollowed out industrial base and an unmanageable mountain of debt owed to foreign creditors. Instead of the support of a strong currency backed by gold, the public now must deal with a modern Fed free to print as much money as politicians want. So rather than getting the benefits of falling consumer prices (as happened during the Depression), consumers today will contend with much higher consumer prices, even as the economy contracts.


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