Fall Of Stocks Commences Elliott Wave Three Down In Stock Wealth
Wednesday, 12. December 2007, 02:49:53
I. U.S Stocks fell after the Fed cut benchark rates by a quarter of a point.
``It should have been more aggressive,'' said Quincy Krosby, who helps manage $330 billion as chief investment strategist at the Hartford in Hartford, Connecticut. ``The market's instinctive reaction is that it's too little too late and that the Fed is behind the curve.'' (Bloomberg Eric Martin)
Citigroup named former Morgan Stanley President Vikram Pandit as chief executive officer before the Fed's decision was announced. Pandit, who takes over immediately, will try to help the largest U.S. bank recover from at least $9 billion of mortgage losses under predecessor Charles O. Prince.
The housing slump, entering its third year, will cool consumer spending and slow U.S. economic growth to 1 percent in the fourth quarter, a survey showed. Homebuilders dropped 7%
The S&P 500 Financials slumped 5%.
Treasuries rallied the most in more than three years.
The yen had a terrific rise, however the U.S. dollar rose, as the Euro and other currencies fell.
The Yen's strong rise decimated the Nikkei and the Japanese Small Stocks.
The S&P fell 2.75%.
The Russell 2000 fell 3.5%
Semiconductors, an indicator of over all economic health and direction, manifested bearish engulfing:
Intel has completed an Elliott 5 up in both daily and weekly charts; note the breaks right in the middle of both Elliot 3 waves up; exceptionally "driven" stocks can do this
The chart of Intel relative to its peer group shows how dramatically overbought Intel has become; the bearish engulfing candlestick tells that Intel is now going to be more valued like its peer group.
In as much as Intel always has wide swings in value relative to its peers, months out from here, Intel will be greatly undervalued to its peers; and in fact may be so for years out.
*
*
II. Yesterday I wrote the article the long gold and short stock investment strategy so lets check in on today's stock action
A. The defensives
XLP Consumer staples shows the lollipop hanging man candlestick reflecting a change in direction
UTH Utilities: the bearish candlestick suggests a sharp drop is at hand
*
*
B. These sectors and international ETFs had shown a topping out
One can use this 'Google Finance chart page' to see the top performers presented below
1) SLX Steel had been up 92% YTD
2) PZD Alternative Energy had been up 42% TYD
3) MOO Agriculture had been up 31% YTD
4) XBI Biotech had been up 34% YTD
5) HHV Health Enabling had been up 31% YTD
6) RXL Ultra Health Care; which I remarked was a short sell candidate only for the high risk investor as it is 200% of Health Care; meaning it is very volatile; it's volatility showed today
7) EEM Emerging Nations had been up 40% YTD
8) IYM Basic Materials had been up 33% YTD
9) UYM Ultra Basic Materials; which I mentioned as a candidate only for the high risk investor as it is 200% of Basic Materials; meaning it is very volatile; like the Ultra Health Care ETF above, it's volatility showed too.
10) FVL Mid Caps had been up 25% YTD
11) MVV Ultra Mid Caps; here again a short selling candidate only for the high risk investor, as it is 200% of Mid Caps; meaning it is very volatile; really took a tumble, which is great for those short sellingg
12) XME Metals & Mining had been up 45% YTD.
13) IIH Internet had been up 8% YTD; this summer's strong decline makes it a good short selling prospect.
14) IYF Finance had been down 12% YTD; the financial sector is leading the way down
15) EWZ Brazil had been up 81% YTD
16) INP India had been up 104% YTD
17) DEM Emerging Income was one of about five that I recommended for an immediate sell yesterday; it sold off well.
18) MUS Municipal Insured Debt; didn't sell off too well today. When the insurance companies -- AMBAC and its peers go bust, there will be an awesome, I mean really huge fall here.
19) HYG High Yield Income didn't sell off too well.
*
*
C. I recommended yesterday an immediate sell on these two
OSIP It fell nicely..
WGO Winnebago gave up most of its recent rise. This stock is an economic barometer stock like the retail sector; it has sold off heavily even before today's action. Recreational travel vehicles manufacturers are soon going to go bust due to absolutely no demand.
*
*
D. The Russell 2000 had been manifesting a broadening top; this chart pattern was exemplified in the markets immediately prior to the 1929 to 1932 crash.
Robert McHugh, in a Safehaven.com article, described this pattern as the Jaws Of Death.
Street Authority says Street Authority says: "When you see a broadening top, the market will eventually drop"; and today it certainly did.
The Russell 2000, IWM is is composed of small U.S. companies highly dependent upon a functional credit system; that is why it's price dropped today 150% of the S&Ps.
The Russell 2000's wave action came through today in a big way as shown below.
The 'credit crisis bear market' is rapidly destroying the equity basis of investors: one needs to think a hard asset -- think gold
DOO Thc chart of DOO relates they are all done.
VIG
DTD
One of favorite movies is The Blues Brothers -- a movie of two dysfunctionals, Jake and Elwood, who are continually dysfunctional. In the movie that do what they do best: sing. I have a vivid mental image of them singing Rawhide; the lyrics of which are totally applicable: 'keep them doggies movin', Rawhide!
*
*
F. Simply exiting the stock market and going into bonds is not recommended
On November 19, 2007 I suggested that one be invested, long gold and short TLT; but, now the time for being short TLT has passed. When most people exit the stock market they will be going into U.S. Treasury bonds -- a bad move; the conventional wisdom of Treasury bonds as a place of safety from falling stock prices needs to be examined.
Look at the big move up that TLT right after the Citicorp-CDO bust of October 9th, 2007, and then again in November 2007 as stocks sold off; then a sell off; and now a jump up today: when people sold out of stocks they fled to "commonly perceived safety in bonds".
The commonly perceived wisdom is often short sighted; and isn't aware of how currency traders and wealthy invest. These are short Treasuries in the futures market, $USB. They were once long, just take a look at $USB -- they've been there and done that: they have taken futures bond all the way up 100% retracement and now they are short. I certainly don't want to be invested in a market where the futures players have short positions: there is just too much 'prevailing downward pressure'.
Here is a dramatic statement: 'U.S. Treasury Bonds have died"; many will be selling stocks and investing in bonds, but they will be investing in a dead financial instrument. I feel I need to reiterate that which I presented above: those with ultra-risk capital are now short the Treasuries in the futures market -- they are short $USB. And the other reason that the 30 year Treasuries are dead, is because they are a dollar denominated asset, and one that investors want more and interest on, because of that dollar denominated risk potential.
The 30 year U.S. Treasury, TLT may stop falling for a while; but, I believe that it is headed downward into oblivion: down to 8 or 10.
Government bonds are now in an Elliot Wave 2 up; soon they will peak again; and then they will enter their Elliot Wave 3 Down.
When the Elliott Wave 3 Wave Down comes to bonds, there will be 'gaps lower' in the chart.
The speed at which the Treasurys will fall be faster, yes faster than today's stock market fall: it will literally be "investment shock and awe"
The weekly chart of the 30 Year U.S. Treasury shows that a 'Kondratieff Fall' has commenced; when the Treasurys Elliot Wave 3 comes, a 'Kondratieff Winter' will commence very quickly.
A transfer of monies into Treasuries will not stabilize them. Nothing can stabilize them, as the yield curve is increasing. While it is currently dropping some, it is going to increase to its 2002 level, and beyond; said another way, it is going to retrace quickly to its 2002 level which is much much higher.
You might ask how can the "yield curve increase, when as you suggest that bonds are falling in value"? The answer is simple, the rate on the 30 year will increase at a faster than on the 10 year and than on the two year. This will be very destructive to the value of the 30 year, since values are inverse of rates.
The Fed rate is simply the rate at which banks get credit.
The interest rate dynamic is this: "the Fed controls the rate on the short end; but the market determines the rate on the long end".
Here are the "real interest rates"; these are the "genuine interest rate":
30 Year Interest Rate.
10 Year Interest Rate.
2 Year Interest Rate.
These interest rate charts tell something: "the bond market place, independent of Federal Reserve action has declared an interest rate hike". This is very damaging to one's investments, whether it be in stocks or bonds.
A rising yield curve is both recessionary and inflationary, as well the cause of much global conflict; wise investors will be seeking shelter in the hard asset gold.
The U.S. dollar $USD is a dying currency: it's chart shows that it's trying to make it back up to a 50 day trend line at $76.75; I am certain that the currency traders will continue to use the Yen and the Euro to ever send the U.S. dollar lower
In as much as gold trades inversely with the dollar, gold will be going up-and-up as the dollar goes down-and-down.
Barry Grey in today's WSWS.org article writes: "The dollar has already lost a quarter of its value against all other currencies since 2002 and 40 percent against the euro, and further interest rate cuts can only push the US currency lower. The position of the dollar, which has been further undermined by the current US housing and credit crisis, is a barometer of the declining relative strength of American capitalism on the world market."
All of the above is why, I recommend an investment strategy of being long gold.
Specifically, I recommend that one immediately sell all long positions in stocks and bonds in IRAs, Keoughs, 401Ks and be liquid to replace it with long gold ETF, GLD; and be ready to use margin credit to implement a limited short selling strategy.
I recommend that one immediately transfer a small portion of one's investment wealth to BullionVault.com once gold -- establish a minimal account at BullionVault.com; and wait for the price of gold to stabilize and/or show a buy signal.
In as much as Contrary Investor documented in its December 2007 article 'The "Other" Credit Market' that the 2002 to 2007 stock market gains were generated by the use of margin credit, I recommend that one do some limited short selling using margin credit; but only with one's retirement assets in the ETF GLD; I recommend that one's investment wealth be at BullionVault.com
*
*
G. In times past, investors have turned to gold when political tensions rise
And today tensions are rising quickly.
Chris Giles and Ralph Atkins report on December 6th in the Financial Times that: "A gulf opened up between Europe's two largest central banks on Thursday after the Bank of England responded to the global credit squeeze by cutting interest rates while the European Central Bank indicated another increase was still on the agenda. The Bank of England cut its main interest rate by a quarter of a percentage point to 5.5%, reflecting its concern that the medium-term economic outlook had darkened in recent weeks. It blamed deteriorating conditions in financial markets and 'a tightening in the supply of credit to households and businesses' that threatened to depress growth and allow inflation to fall too far below the Bank's 2% target."
I look for regional governments to form based upon principles of global governance modeled after the, Security and Prosperity Partnership of North America, the SPP, announced on March 23, 2005 at Baylor University.
I expect regional currencies to replace the dollar as recommended by think tank, Council of Foreign Relations in its white paper Regional Monetary Integration. Arif Sharif and Matthew brown report on December 5th in Bloomberg that: "Gulf Arab nations may revalue their dollar-pegged currencies in the next two months to combat the inflationary affect of a weakening dollar, according to Standard Chartered Plc. The six Gulf Cooperation Council members, Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman are restricted in the fight against inflation because their dollar pegs force them to mimic U.S. Federal Reserve monetary policy. Rising import prices caused by the dollar's decline and increased revenue from higher oil prices has pushed inflation to a five- year high in the Gulf region... The Supreme Council of the GCC set out plans to study 'inflation and soaring prices and their repercussions on citizens,' according to the Emirates News Agency yesterday..."
The U.S. dollar: it's continually under attack by the currency traders: it is going to fall at an ever increasing rate; I do not favor dollar denominated investments of any kind.
*
*
III. The Elliott Wave Three Down Of Stock Wealth Is Seen In The Total Stock Market ETF, VTI
Stock wealth is being destroyed by an Elliott Wave 3 Down; and today's down makes it a Major Elliott Three Wave with Minor Elliot Wave 3 Down
Elliott Wave 3s are the most sweeping and dramatic of all waves: they build wealth on the way up; and destroy wealth on the way down.
With Major 3, and now with Minor 3, an aggressive dissolution of stock wealth has started.
Special thanks to Yahoo Finance which provides the historical price record used for the wave count.
October 9th, 2007 'stock wealth' saw a Grand Super Cycle High Up end; and a Grand Super Cycle Down begin: VTI topped out at 155.49: investment concern with Citicorps sub-prime loans on October 8th started the dissolution of stock wealth.
Wave 1 Down came on October 19th with VTI at 149.00
Wave 2 Up ended on October 31th with VTI at 153.91
Wave 3 Down commenced on October 31, 2007; and December 10th price of 150.88 marks minor wave 3 down.
Permabear Tim Knight in his article Justice Prevails provides the Russell 2000's chart where one can see the October 9th Grand Finale of Stock Wealth, as well as the action to arrive at Wave 3-3 Down.
In its recent rally, the Russell 2000, made a strong retracement recovery, powerfully demonstrating the Broadening Top patttern from which with today's action, prices have dropped.
Here is a chart of the S&P Mid Caps which "ealth jockeys" ride-up and ride-down for profiteering. Good for them; unfortunately continuing to do so is not advantageous, as all one is left with is a dollar denominated asset that is continually decreasing in relation to gold and other currencies.
*
*
IV. Gold Is In An Elliott Wave 3 Up
Alf Field in his article Point of Recognition documents that we are in an Elliot 3 Wave up.
I encourage all to wait for a buy signal for gold which will come from its stock chart and its ratios compared to other investments.
When one compares gold to silver one can see that gold is a better investment than silver.
*
*
V. The Following Are Immediate Short Sells For Those Looking To Do So
Keywords *Navaro*
``It should have been more aggressive,'' said Quincy Krosby, who helps manage $330 billion as chief investment strategist at the Hartford in Hartford, Connecticut. ``The market's instinctive reaction is that it's too little too late and that the Fed is behind the curve.'' (Bloomberg Eric Martin)
Citigroup named former Morgan Stanley President Vikram Pandit as chief executive officer before the Fed's decision was announced. Pandit, who takes over immediately, will try to help the largest U.S. bank recover from at least $9 billion of mortgage losses under predecessor Charles O. Prince.
The housing slump, entering its third year, will cool consumer spending and slow U.S. economic growth to 1 percent in the fourth quarter, a survey showed. Homebuilders dropped 7%
The S&P 500 Financials slumped 5%.
Treasuries rallied the most in more than three years.
The yen had a terrific rise, however the U.S. dollar rose, as the Euro and other currencies fell.
The Yen's strong rise decimated the Nikkei and the Japanese Small Stocks.
The S&P fell 2.75%.
The Russell 2000 fell 3.5%
Semiconductors, an indicator of over all economic health and direction, manifested bearish engulfing:
Intel has completed an Elliott 5 up in both daily and weekly charts; note the breaks right in the middle of both Elliot 3 waves up; exceptionally "driven" stocks can do this
The chart of Intel relative to its peer group shows how dramatically overbought Intel has become; the bearish engulfing candlestick tells that Intel is now going to be more valued like its peer group.
In as much as Intel always has wide swings in value relative to its peers, months out from here, Intel will be greatly undervalued to its peers; and in fact may be so for years out.
*
*
II. Yesterday I wrote the article the long gold and short stock investment strategy so lets check in on today's stock action
A. The defensives
XLP Consumer staples shows the lollipop hanging man candlestick reflecting a change in direction
UTH Utilities: the bearish candlestick suggests a sharp drop is at hand
*
*
B. These sectors and international ETFs had shown a topping out
One can use this 'Google Finance chart page' to see the top performers presented below
1) SLX Steel had been up 92% YTD
2) PZD Alternative Energy had been up 42% TYD
3) MOO Agriculture had been up 31% YTD
4) XBI Biotech had been up 34% YTD
5) HHV Health Enabling had been up 31% YTD
6) RXL Ultra Health Care; which I remarked was a short sell candidate only for the high risk investor as it is 200% of Health Care; meaning it is very volatile; it's volatility showed today
7) EEM Emerging Nations had been up 40% YTD
8) IYM Basic Materials had been up 33% YTD
9) UYM Ultra Basic Materials; which I mentioned as a candidate only for the high risk investor as it is 200% of Basic Materials; meaning it is very volatile; like the Ultra Health Care ETF above, it's volatility showed too.
10) FVL Mid Caps had been up 25% YTD
11) MVV Ultra Mid Caps; here again a short selling candidate only for the high risk investor, as it is 200% of Mid Caps; meaning it is very volatile; really took a tumble, which is great for those short sellingg
12) XME Metals & Mining had been up 45% YTD.
13) IIH Internet had been up 8% YTD; this summer's strong decline makes it a good short selling prospect.
14) IYF Finance had been down 12% YTD; the financial sector is leading the way down
15) EWZ Brazil had been up 81% YTD
16) INP India had been up 104% YTD
17) DEM Emerging Income was one of about five that I recommended for an immediate sell yesterday; it sold off well.
18) MUS Municipal Insured Debt; didn't sell off too well today. When the insurance companies -- AMBAC and its peers go bust, there will be an awesome, I mean really huge fall here.
19) HYG High Yield Income didn't sell off too well.
*
*
C. I recommended yesterday an immediate sell on these two
OSIP It fell nicely..
WGO Winnebago gave up most of its recent rise. This stock is an economic barometer stock like the retail sector; it has sold off heavily even before today's action. Recreational travel vehicles manufacturers are soon going to go bust due to absolutely no demand.
*
*
D. The Russell 2000 had been manifesting a broadening top; this chart pattern was exemplified in the markets immediately prior to the 1929 to 1932 crash.
Robert McHugh, in a Safehaven.com article, described this pattern as the Jaws Of Death.
Street Authority says Street Authority says: "When you see a broadening top, the market will eventually drop"; and today it certainly did.
The Russell 2000, IWM is is composed of small U.S. companies highly dependent upon a functional credit system; that is why it's price dropped today 150% of the S&Ps.
The Russell 2000's wave action came through today in a big way as shown below.
The 'credit crisis bear market' is rapidly destroying the equity basis of investors: one needs to think a hard asset -- think gold
DOO Thc chart of DOO relates they are all done.
VIG
DTD
One of favorite movies is The Blues Brothers -- a movie of two dysfunctionals, Jake and Elwood, who are continually dysfunctional. In the movie that do what they do best: sing. I have a vivid mental image of them singing Rawhide; the lyrics of which are totally applicable: 'keep them doggies movin', Rawhide!
*
*
F. Simply exiting the stock market and going into bonds is not recommended
On November 19, 2007 I suggested that one be invested, long gold and short TLT; but, now the time for being short TLT has passed. When most people exit the stock market they will be going into U.S. Treasury bonds -- a bad move; the conventional wisdom of Treasury bonds as a place of safety from falling stock prices needs to be examined.
Look at the big move up that TLT right after the Citicorp-CDO bust of October 9th, 2007, and then again in November 2007 as stocks sold off; then a sell off; and now a jump up today: when people sold out of stocks they fled to "commonly perceived safety in bonds".
The commonly perceived wisdom is often short sighted; and isn't aware of how currency traders and wealthy invest. These are short Treasuries in the futures market, $USB. They were once long, just take a look at $USB -- they've been there and done that: they have taken futures bond all the way up 100% retracement and now they are short. I certainly don't want to be invested in a market where the futures players have short positions: there is just too much 'prevailing downward pressure'.
Here is a dramatic statement: 'U.S. Treasury Bonds have died"; many will be selling stocks and investing in bonds, but they will be investing in a dead financial instrument. I feel I need to reiterate that which I presented above: those with ultra-risk capital are now short the Treasuries in the futures market -- they are short $USB. And the other reason that the 30 year Treasuries are dead, is because they are a dollar denominated asset, and one that investors want more and interest on, because of that dollar denominated risk potential.
The 30 year U.S. Treasury, TLT may stop falling for a while; but, I believe that it is headed downward into oblivion: down to 8 or 10.
Government bonds are now in an Elliot Wave 2 up; soon they will peak again; and then they will enter their Elliot Wave 3 Down.
When the Elliott Wave 3 Wave Down comes to bonds, there will be 'gaps lower' in the chart.
The speed at which the Treasurys will fall be faster, yes faster than today's stock market fall: it will literally be "investment shock and awe"
The weekly chart of the 30 Year U.S. Treasury shows that a 'Kondratieff Fall' has commenced; when the Treasurys Elliot Wave 3 comes, a 'Kondratieff Winter' will commence very quickly.
A transfer of monies into Treasuries will not stabilize them. Nothing can stabilize them, as the yield curve is increasing. While it is currently dropping some, it is going to increase to its 2002 level, and beyond; said another way, it is going to retrace quickly to its 2002 level which is much much higher.
You might ask how can the "yield curve increase, when as you suggest that bonds are falling in value"? The answer is simple, the rate on the 30 year will increase at a faster than on the 10 year and than on the two year. This will be very destructive to the value of the 30 year, since values are inverse of rates.
The Fed rate is simply the rate at which banks get credit.
The interest rate dynamic is this: "the Fed controls the rate on the short end; but the market determines the rate on the long end".
Here are the "real interest rates"; these are the "genuine interest rate":
30 Year Interest Rate.
10 Year Interest Rate.
2 Year Interest Rate.
These interest rate charts tell something: "the bond market place, independent of Federal Reserve action has declared an interest rate hike". This is very damaging to one's investments, whether it be in stocks or bonds.
A rising yield curve is both recessionary and inflationary, as well the cause of much global conflict; wise investors will be seeking shelter in the hard asset gold.
The U.S. dollar $USD is a dying currency: it's chart shows that it's trying to make it back up to a 50 day trend line at $76.75; I am certain that the currency traders will continue to use the Yen and the Euro to ever send the U.S. dollar lower
In as much as gold trades inversely with the dollar, gold will be going up-and-up as the dollar goes down-and-down.
Barry Grey in today's WSWS.org article writes: "The dollar has already lost a quarter of its value against all other currencies since 2002 and 40 percent against the euro, and further interest rate cuts can only push the US currency lower. The position of the dollar, which has been further undermined by the current US housing and credit crisis, is a barometer of the declining relative strength of American capitalism on the world market."
All of the above is why, I recommend an investment strategy of being long gold.
Specifically, I recommend that one immediately sell all long positions in stocks and bonds in IRAs, Keoughs, 401Ks and be liquid to replace it with long gold ETF, GLD; and be ready to use margin credit to implement a limited short selling strategy.
I recommend that one immediately transfer a small portion of one's investment wealth to BullionVault.com once gold -- establish a minimal account at BullionVault.com; and wait for the price of gold to stabilize and/or show a buy signal.
In as much as Contrary Investor documented in its December 2007 article 'The "Other" Credit Market' that the 2002 to 2007 stock market gains were generated by the use of margin credit, I recommend that one do some limited short selling using margin credit; but only with one's retirement assets in the ETF GLD; I recommend that one's investment wealth be at BullionVault.com
*
*
G. In times past, investors have turned to gold when political tensions rise
And today tensions are rising quickly.
Chris Giles and Ralph Atkins report on December 6th in the Financial Times that: "A gulf opened up between Europe's two largest central banks on Thursday after the Bank of England responded to the global credit squeeze by cutting interest rates while the European Central Bank indicated another increase was still on the agenda. The Bank of England cut its main interest rate by a quarter of a percentage point to 5.5%, reflecting its concern that the medium-term economic outlook had darkened in recent weeks. It blamed deteriorating conditions in financial markets and 'a tightening in the supply of credit to households and businesses' that threatened to depress growth and allow inflation to fall too far below the Bank's 2% target."
I look for regional governments to form based upon principles of global governance modeled after the, Security and Prosperity Partnership of North America, the SPP, announced on March 23, 2005 at Baylor University.
I expect regional currencies to replace the dollar as recommended by think tank, Council of Foreign Relations in its white paper Regional Monetary Integration. Arif Sharif and Matthew brown report on December 5th in Bloomberg that: "Gulf Arab nations may revalue their dollar-pegged currencies in the next two months to combat the inflationary affect of a weakening dollar, according to Standard Chartered Plc. The six Gulf Cooperation Council members, Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman are restricted in the fight against inflation because their dollar pegs force them to mimic U.S. Federal Reserve monetary policy. Rising import prices caused by the dollar's decline and increased revenue from higher oil prices has pushed inflation to a five- year high in the Gulf region... The Supreme Council of the GCC set out plans to study 'inflation and soaring prices and their repercussions on citizens,' according to the Emirates News Agency yesterday..."
The U.S. dollar: it's continually under attack by the currency traders: it is going to fall at an ever increasing rate; I do not favor dollar denominated investments of any kind.
*
*
III. The Elliott Wave Three Down Of Stock Wealth Is Seen In The Total Stock Market ETF, VTI
Stock wealth is being destroyed by an Elliott Wave 3 Down; and today's down makes it a Major Elliott Three Wave with Minor Elliot Wave 3 Down
Elliott Wave 3s are the most sweeping and dramatic of all waves: they build wealth on the way up; and destroy wealth on the way down.
With Major 3, and now with Minor 3, an aggressive dissolution of stock wealth has started.
Special thanks to Yahoo Finance which provides the historical price record used for the wave count.
October 9th, 2007 'stock wealth' saw a Grand Super Cycle High Up end; and a Grand Super Cycle Down begin: VTI topped out at 155.49: investment concern with Citicorps sub-prime loans on October 8th started the dissolution of stock wealth.
Wave 1 Down came on October 19th with VTI at 149.00
Wave 2 Up ended on October 31th with VTI at 153.91
Wave 3 Down commenced on October 31, 2007; and December 10th price of 150.88 marks minor wave 3 down.
Permabear Tim Knight in his article Justice Prevails provides the Russell 2000's chart where one can see the October 9th Grand Finale of Stock Wealth, as well as the action to arrive at Wave 3-3 Down.
In its recent rally, the Russell 2000, made a strong retracement recovery, powerfully demonstrating the Broadening Top patttern from which with today's action, prices have dropped.
Here is a chart of the S&P Mid Caps which "ealth jockeys" ride-up and ride-down for profiteering. Good for them; unfortunately continuing to do so is not advantageous, as all one is left with is a dollar denominated asset that is continually decreasing in relation to gold and other currencies.
*
*
IV. Gold Is In An Elliott Wave 3 Up
Alf Field in his article Point of Recognition documents that we are in an Elliot 3 Wave up.
I encourage all to wait for a buy signal for gold which will come from its stock chart and its ratios compared to other investments.
When one compares gold to silver one can see that gold is a better investment than silver.
*
*
V. The Following Are Immediate Short Sells For Those Looking To Do So
Keywords *Navaro*
WIDGETIZE