Market Rolls Over, so Bullard Rolls Over

And so the new phase begins.  That would be the one where confidence in policy makers begins to wane until one day we wake up and find they are the same buffoons they were in 2011 and in 2008 and in 2001.  James Bullard of all people, one of my dear ‘Bad Cops’ (wonder what Fisher is thinking) gets trotted out into the media to flap his gums about extending QE.

Yes, a real healthy market we’ve got going here.  It can’t even take a normal correction without policy makers getting hot under the collar.  It’s a nice ironic touch too, trotting out a bad cop with a reputation for tough love.

Bullard’s surprise suggestion to continue QE lifts markets

In other words, Bullard was brought out there with a hand grenade to be dropped right down poor old Uncle Buck’s chimney.

I am net long this mess at the moment but I have to tell you, this does not give me confidence as a bull.  Quite the contrary.

The trend has changed and these guys are not going to jawbone that away.

Semiconductor Index @ Support

Looking at a couple places where the downside started we note the Russell 2000 trying to be green for a 3rd day in a row and we note the Semiconductor index still holding the key identified support level, which has touch points dating back over a decide.  In other words, it’s mucho significanto.  Adding to the drama, the measurement off the Double Top pattern has been registered, so SOX is a candidate to bounce if it so chooses.

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The Treasury Market Safe Haven Bid is Bogus

Guest Post by Bruno de Landevoisin

It’s not about the current Dollar & Treasury market safe haven bid, it’s about tomorrow’s confidence in our monetary system.  

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Are you confident?

Have you asked yourself why Gold remains by far the best performing asset class of the entire new millennium.  It’s an undisputable categorical fact, and there clearly is a well established and completely understood reason for this. Monumentally excessive irreversible debt loads can no longer be discharged without necessitating the devaluation of the currency. Due to this certitude, throughout this millennium we have experienced an extended period of extraordinary monetary accommodation which is unprecedented in the modern central banking era.

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Free Report: “This is It”

[edit] From EWI, which has taken enough grief over its patient stance these last few years.  Whether this is “it” or not, find value in a range of opinions.  This is an extreme and possibly correct opinion.  Good old Bob… ;-)

As Bob Prechter says, bear markets move fast and are intensely emotional.

Please read this free report that could help you sidestep perhaps the biggest bear market in living memory.

Anyone who has been watching the market for the past few years knows that Wall Street wanted the stock market to get back to where it was.

You know, to the optimism and price levels in the time before the 2008-2009 financial crisis.

And Wall Street did get its way in the Dow Industrials more than a year ago. The index reached new all-time highs in 2013.

As for the return to pre-crisis optimism, that took a bit longer. But return it did, and very recently, in two measureable ways:

  1. Stock ownership just hit “a rare extreme” — 34.4% of total financial assets among US households. That’s a higher percentage ownership than in 2007.
  2. The percentage of bears among advisory services fell to 13.3%, the lowest in 27 years. “This means 87.6% of advisors are bullish on the long term trend.”

Of course, these are contrary indicators. Many other similar measures have reached similar extremes. So when it comes to a “Return to 2007,” the real question is:

How far will the re-enactment go?

Markets are most likely to turn when the fewest number of participants expect it. The reason truly big market meltdowns become meltdowns is because so few people are ready beforehand.

We’ve seen a lot of down days in the stock market since the September 19 high. And, after every one of those losses, I read and hear the same idea from the media: This is “a buying opportunity.”

In truth, that notion is also part of the re-enactment.

It’s hardly been two weeks since Bob Prechter published his Special Interim Report. It posted in the afternoon on September 19, the same day as the high.

In 20-point type, Bob said

“This Is It.”

It’s times like these that investors need to prepare for the coming bear market. What we’re seeing is only the beginning. We would rather see you prepare early instead of late.

Preparing early means sidestepping perhaps the biggest bear market in living memory. It means safeguarding your spending power as others struggle to make ends meet.

As Bob Prechter says, bear markets move fast and are intensely emotional; investors and traders who are prepared have greater opportunities on the downside than on the upside.

Please read this free report, “This is It.”

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world’s largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.

Huey to Russell: Strike 1

Huey has a lesson for all those punch drunk small cap speculators out there.  That lesson is “in 2010 some chart wise guy came up with a cute 3 Snowmen (888) target for me and I tried, like the little choo choo that thought it could… but I couldn’t.”

The first red arrow represents Strike 1, thinks Huey.

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Cash+

Who would have thought that you could stow cash away in a safer equivalent (1-3 year US Treasury bonds), keep your principal, add asset value and get monthly income?  Well that’s what my primary cash ‘equiv.’ is doing now that the bull fantasy of organic economic growth seems to be coming unglued or is at least getting a righteous adjustment.  Of course the likes of SHY could eventually be secondary to a certain pretty, heavy and much reviled elemental relic in this atmosphere.

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