So many of you know I read extensively, I would say I read about about 25-30 hours a week what I call homework, (wish i was getting paid for it but you get paid in knowledge that most wont amass if not seen on a 10 min segment on CNBC). Talking about CNBC, viewership is down 30% especially in the 25-42 age group.
One of my regular reading is that of MR doom and gloom Faber. Last week thursday he claimed that the US will 100% go into a hyperinflationary period a thought I have had for years especially since 2007 when we started to see a huge issuance of bonds to fund the ever increasing deficit. I really do agree with this but the question is when? The thing with hyperinflation you dont want to be a owner of stocks you want to own hard commodities and be shorting bonds and having a increased allocation of long term bonds for income.
Dr. Doom as he is called to most of us was one of the first to spot China as the next great economical power and called the fall of the equity markets in 2008. He basically trades bonds, currencies and commodities.
For my readers who have interest in gold and other precious metals that news might be very pleasing to hear but who knows when we going to enter this hyperinflation phase.
If you are a very long term investor an accumulation of these metals might be a safe bet.
MARKETJEDI
Sunday, August 2, 2009
How did I get 1006 area
Well the projection is actually 1007. The question again is whether this will be the HIGH and another leg down perhaps breaking 666, or will this be a higher bottom test and then a longer rally to 1100-1200 on the S&P.
The best analysis for the bulls is the reverse Head and shoulder pattern in place on the daily and it would have a target somewhere up to the mid 1100 area. Since reverse head and shoulders are just that temporary patterns it would match up with renewed weakening of the economy and over valuation of stocks leading to aggressive profits taking. If the reverse head and shoulder pattern take complete form we will print 1007 for sure this week, the 37% retracement stands at 1028 and then the 50% retracement is 1125.
The best analysis for the bulls is the reverse Head and shoulder pattern in place on the daily and it would have a target somewhere up to the mid 1100 area. Since reverse head and shoulders are just that temporary patterns it would match up with renewed weakening of the economy and over valuation of stocks leading to aggressive profits taking. If the reverse head and shoulder pattern take complete form we will print 1007 for sure this week, the 37% retracement stands at 1028 and then the 50% retracement is 1125.
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