From the email to subscribers that accompanied NFTRH 361:
“The Indicators segment beats us all to a pulp talking about yield spreads, but I find more and more that this work should not be easy or readily packaged into sound bites. It just doesn’t work that way unless you are promoting an orthodoxy or an agenda.”
That’s my story and I’m sticking to it. NFTRH 361 out now…
The above title was assigned to this post while writing it and realizing I was blabbing a lot about myself and my own methods.
I finally had the time to do more than skim Robert Prechter’s most recent EW Theorist. I can see why they released it for free, because in it he ran a laundry list of calls that have gone well and one – the US stock market – that had not yet done so (and indeed has been the market that has defined him as a frustrated perma-bear to many) as of its publish date. Well, shortly thereafter that holdout market went well to join the rest of the world.
Here is the link again, if you have not read it: Most recent Elliott Wave Theorist
I should note that I do not currently subscribe, although I have at times in the past. I need to be very clear in my own thinking and trust my own methods, which have been working well, without too much of anyone else’s cross-talk. But I always find Prechter an interesting read when I do have access. He’s beyond interesting, really. He’s pretty much one of a kind.
Some of my observations…
- Prechter mentions exactly what I have harped on repeatedly; how economists (and financial services entities) tend to extrapolate things in linear fashion. He notes “we extrapolate them in fractal fashion”. I on the other hand, extrapolate them with a combination of technical, sentiment/psych and inter-market indicators. Ref. for instance the PALL-Gold ratio, which made a bearish signal months ago. I knew not why, but we certainly respected it and were prepared for the market damage that followed it.
- As noted in the previous post, the guy was right on with Crude Oil, over the long-term. EWI were also right on with Asia and Emerging Markets, while admitting that they have fumbled the US stock market, which “has just floated around as if in a dream”. Well, it woke up last month and I for one could not be happier because finally it is in motion. I care more about motion than direction.
- Gold bugs used to laugh at Prechter routinely. Indeed, I had to use my will to tune him out as his calls for gold’s top rose from 375 to 425 to an eventual 1900, when he was finally right. US stock bugs laugh at prechter the same way now. Anyway, he goes into detail on gold, silver and the miners, calling for a significant counter trend rally in the bombed out sector as well as in crude oil. But these things are within larger bear markets.
- Finally, he makes some good sense of Dow Theory, an art that I don’t pay much attention to, but appears valid and he shows why.
Anyway, the Theorist is well worth your 10 minutes of time if you’d like to pick it up, free of charge. Also covered are China, real estate, etc. It’s a take on markets as only Prechter can take it.
It has been a while since we went around DARPA’s creation (or was it Al Gore’s?) of networked thingamajigs…
Robert Prechter’s August Elliott Wave Theorist is free, no strings. I skimmed it and it is a big enough picture of the markets to be very applicable now. A big review of Dow Theory and US stocks and gold, silver, miners, oil and commodities.
Say what you will about Prechter – and he certainly elicits strong feelings both ways – but he nailed crude oil going back to 2007. He has infinite patience; maybe too much patience, it seems sometimes.
Anyway, the EWT is always an interesting read. Go get it for free…
The Euro is gaining the bid as short covering pushes it higher. Today it is popping through resistance and will try to make that a support level.
The target is 120, which would likely be a good opportunity to short it or potentially long Europe again.
We’ll see. It’s a macro market where letting things play out rather than knee jerking to conclusions is likely to work best until we get a read on the nature of this.
Don’t look now but the Dow Transports are working on a short-term trend change to the upside with a ‘W’ bottom and a pop above the declining MA 50’s.
Will TRAN have ended up leading the way to the mildest of market sags before bullish reversal? Well, not until it gets through the red resistance line and then the MA 200. If it does those things, it is going to get bullish and if Dow Theory means much (I still have my doubts) it would eventually spread out to the broad markets. First things first…
NFTRH has been bearish on copper for years now due simply to one chart; a long-term monthly view that is as ghastly as any I can recall.
I mean, sometimes markets are really complex, difficult to manage and screw ups abound. But this right here? This one simple chart has been idiot proof bearish since forever.
The copper market fears that “the plunging stock market could destabilize the economy and impact resource demand,” said Colin Cieszynski, chief market strategist at CMC Markets.
“Copper is now at a big turning point technically,” he said.
If prices can “bounce back above $2.45 soon, it could be a bear trap washout and may signal a bottom,” Cieszynski said. But if they don’t, and $2.45 becomes new resistance, “look out below as a measured move from the $2.45 to $2.95 channel of the last few months suggests $1.95 could potentially be tested down the road.”
Colin, the copper market fears nothing; at least nothing that has gone on lately. The copper market made a top and has been bear flagging through a bear market since 2011. WTF are you talking about, 2.45?? Copper is and has been bearish. Stop whipsawing a world full of MSM reading substance abusers.