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Monday, November 2, 2009

UGLY Market

Wednesday thru Friday was major ping-pong action as the market violently moved back and forth. It has the effect of turning me around so I didn't know which way I was facing.

Below are the stock charts, and it isn't pretty. Ask small children to leave the room before you view. The DJIA the last bastion of optimism for the bulls. The USD is showing some signs of softness, that could change on a dime.

I am flip-flopping more than a Politician. Frankly, toss a coin, and that's the direction in the next few months. but I am throwing my hat into bad decline. To prevent getting pushed around more from the market, I am going to try to build a position as we decline and continue to do so.

If you want to go long something, Gold miners are not that bad here, but just be careful. (GDX)

Elliot Wave International has been talking about this stock pattern for years, and its finally here. One thing I deviate from the chartists is I realize the government can continually change the rules to get another pop. But the US Dollar's valuation is starting to get to the point of severe permanent damage.

It boils down to how are the bank losses going to manifest? Stock market decline or US dollar destruction. That, you will have to ask Ben Bernanke on which outcome he prefers. If you want to bet the "favorite" , bet he will throw the US dollar out the window to keep prices up. That will lead to US government having severe issues, possibly collapse.

Even though I distrust Mr. Bernanke, I am still betting he won't destroy the US dollar to the point of causing permanent damage.

The charts below. SPX is to go below 666 in the next month or year. There is always the chance of yet another counter rally, but I think its getting long in the tooth.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

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