Honest Information, Profitable Trading
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|Posted on January 23, 2016 at 4:56 PM||comments (2)|
I was among the few analysts who saw the DOW heading up, all the way past 13,000 - 14,000 - 15.000 - 16,000 - 17,000 - 18,000 - I was even expecting it to hit 18,500. This was purely based on hunch, a freshy reading of the charts (and seeing a long-term bull trend, which just brightened my eyes at a meeting of the Market Technicians Association that I attended at that time, and immediately wrote on my blog). Similarly, it was at the same meeting that I saw Oil go below a certain x-day Moving Average, and people were still talking as if nothing had happened!
That reading of the charts was coupled with the confidence of the spigot shaft being on, the fountain overflowing, of the quantitative easing continuing under Federal Reserve policy. That reading can no longer be backed with confidence, as there is lack of information in the market as to whether the U.S. is still continuing with a sizeable pumping of liquidity into the markets each and every month or not. Treasury Secretary Jack Lew has said not a word; the Tea Party and the Republicans would certainly cut it, regardless of sequestration cuts or government department shutdowns.....But under the Democrat President's aegis, it can be assumed the funding is still in place....at least those were the sentiments expressed not long ago, that the funding was in place till at least March 2016....on which I amongst others have suggested that the Debt Ceiling be fixed till November at least, when it will be clear who is the President-elect; or better still, till January 20th 2017, when the new President (whoever that is) will be in the White House.
There is a meeting of the FOMC scheduled for Monday and Tuesday next week. At that, hopefully, confirmation will be sought from the Federal Chairwoman regarding the status of the funding. If she confirms - and in most probability it is perhaps just a formality, how can anyone assume otherwise -that the funding is in place, and till when, it is equally probable that the market participants will gain heart from that and there could be renewed support of the stockmarket. Wall Street and the participants could certainly sing Luck be a lady tonight.
Late in 2015, I got a Tweet saying 'I have been on Twitter exactly 7 years, 1 month and 23days since 20th September 2008'. At that time, I was not aware what the person was on about. Recently, checking on the mathematical calculations of the great W.D. Gann, I realised that it was Gann who said at the end of 7 years, 1 month and 23 days after a market picks up, check to see which way it trends.
That period of time indicates a change in trend....but I suppose, the trend could equally continue upwards, based on the fact that in the time of W.D. Gann, there was no quantitative easing, capital had to be accumulated anew through hard work and acumen and then put to work in the stockmarket. Whereas today, the U.S., Japan, China, the European Central Bank have all got their spigot shafts on, and a constant stream of money is available to bail out, prop up, buy mortgage backed securities, etc, underpinning the financial health of all the participating nations. It was the same capital issued after the crash of 2008 that could be said to be the Mother of this Recovery. While all these governments are issuing so much capital, which finds its way into the stockmarket and other investments, there was no reason to fear of a bearish tone setting in. But doubts of the correlation has certainly left nimble participants taking money off the table. After the DOW has recently fallen about 20 percent in total recently, the damage has already been done....it is a bit late for others who wish to sell; indeed, an uptrend or upchannel may be starting to form. But you make your choice, I offer no advise, I am merely expressing my opinion.
There are certain observations about an Election Year in regards to the stockmarket, such as that it will be down in January, and then up in March. If that holds true, the DOW could well be up once again, let's wait and see.
Hopefully Hillary Clinton finds support in Iowa this time, that it may augur very good for her making it to the White House. She has a tough campaign ahead of her yet. Wall Street would be willing to crown her, as it will mean another stellar performance for the markets this year, but the real America will need to show her their support if they would like to see a Democrat returned as President. As they say, now is the time for all good men and women to come to the aid of the Party.
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