Generational Dynamics Forum - New Site

This is from somebody who has spent decades studying the stock market and has made a lot of money in the market. He's probably forgotten more about stock market technical patterns than I've ever learned.

During the month of December, we've seen more contradictions...in market behavior...than we can recall in years...The signals are in direct conflict. We've spent...searching for an explanation for this paradox...Frankly we flat don't know...

Noise, disorder, false signaling, whatever you want to call it, seems to fit with his assessment.

Higgenbotham wrote:This is from somebody who has spent decades studying the stock market and has made a lot of money in the market. He's probably forgotten more about stock market technical patterns than I've ever learned.

During the month of December, we've seen more contradictions...in market behavior...than we can recall in years...The signals are in direct conflict. We've spent...searching for an explanation for this paradox...Frankly we flat don't know...

Noise, disorder, false signaling, whatever you want to call it, seems to fit with his assessment.

There is SO MUCH noise in the markets right now, nothing makes sense. I really believe we will see major global war within 12-18 months. We've gone about as far as we can without something majore arising.

thomasglee wrote:

Higgenbotham wrote:This is from somebody who has spent decades studying the stock market and has made a lot of money in the market. He's probably forgotten more about stock market technical patterns than I've ever learned.

During the month of December, we've seen more contradictions...in market behavior...than we can recall in years...The signals are in direct conflict. We've spent...searching for an explanation for this paradox...Frankly we flat don't know...

Noise, disorder, false signaling, whatever you want to call it, seems to fit with his assessment.

There is SO MUCH noise in the markets right now, nothing makes sense. I really believe we will see major global war within 12-18 months. We've gone about as far as we can without something majore arising.

I'm likewise thinking that that most volatile, worrisome potential conflict in the world also involves China. However, I'm respectfully thinking that a major conflict with China would not happen until towards the end of the decade or maybe even a bit past it. While I know that there is the ascendancy of the hotheaded "Chinese Generation-X" that is picking up in 2012, I'm thinking that significantly more tension and significantly more military buildup on the part of China will be a likely prerequisite to any major global conflict involving China. But again, I have no crystal ball here.

However, if some sort of "Clash of Civilizations" world war were to occur in 12–18 months, this would create an "out-of-whack" Fourth Turning and associated saecular cycle, akin to the American Civil War's effect on that particular Fourth Turning in America and its associated saecular cycle. —Best regards, Marc

http://www.businesscycle.com/reports_indexes/allindexes

Click on the plus button next to WLIW, then on the 5 year graph to see a good representation of the Weekly Leading Index. As can be seen, rarely does this index diverge this far from the stock market indices. This is one of many indicators saying that stock prices should be closer to the October lows than the October highs.

http://www.financialsense.com/contribut ... -territory

At the close of the market on Dec. 23, Lowry's Buying Power Index stood at 262 and their Selling Pressure Index stood at 434. This means that Selling pressure (supply) was 172 points above Buying Power (demand).

This is the posture of a bear market and not a bull market. It means that any sudden drop in Buying Power or a sudden rise in Selling Pressure can send the stock market spiraling down almost without notice.

Another.

I have a theory that there is a pool of money readily available to drive the stocks upward starting next week. The pool will be sufficient to carry the S&P at least 50 points higher with perhaps a goal of 100 points. This may take more than the 5 trading days next week. Although I predict we see the dynamics materialize in the early part of next week.

This entry was posted on Saturday, December 17th, 2011 at 1:44 pm

http://blog.markdcook.com/?p=324

That's exactly what happened.

http://uamconsult.com/book_606_chapter_ ... ofits.html

Higgie:

Read the links you posted above. Excellent !!!. I encourage every trader to read and read again Mark Cook's story. Trading is work.

I'm becoming more and more suspicious that...might be attempting to support the market. There certainly exists a motive...The funds are there from the...TARP money. Moreover, with our fiat system, what is to stop...from simply printing money and using it to buy equities?

This e-mail was forwarded to me. It was written by a well known financial analyst, now retired. I googled some of the exact phrases in the e-mail and it's not public. There are many old market hands who have expressed doubt about the veracity of current stock market levels, both publicly and privately. Naturally, I'm only quoting enough to get the main point across and protect the person's identity.

retired financial analyst wrote:Moreover, with our fiat system, what is to stop...from simply printing money and using it to buy equities?

If the Fed wants to prop up the market it can just loan money cheap enough and long enough that someone thinks they can make a profit borrowing money and buying stocks. For example, if they loaned Goldman Sachs money at 2% for 30 years they could buys some gold stocks and expect to make a profit. So the Fed does not need to buy the equities themselves to prop up the market.

Dear Trevor,

Trevor wrote: > John, if the stock market is close to twice the trend value, why
> hasn't it crashed to around DOW 2000-3000? It's been about 3 years
> and that was all it took the last time around.

I expected a crash much earlier, but I didn't anticipate the powerful
effects of quantitative easing and fiscal stimulus programs totalling
some $10 trillion. Most of this money flowed into the stock market
and related markets, but it did nothing to stimulate economic growth,
because of the generational era. As a result, the crisis has been
postponed, and made worse because the distortions have only grown.

John

Dear David,

shoshin wrote: > John, isn't it only the losers who have to repay their debts? If
> China "loses the war," we won't pay them anything. However, if we
> lose...

That's probably true, but there are other possibilities.

Remember that the aftermath of a crisis war is different from the
aftermath of non-crisis wars. After WW I, we demanded reparations
from Germany, and when that led to Nazi Germany, we concluded that
reparations are a bad idea. So after WW II, we implemented the
Marshall Plan and poured huge amounts of money into Germany and Japan.

Maybe the Chinese will be nice guys and set up a Chinese Marshall Plan
for us.

After a crisis war, the objective of the survivors is to make sure
that no such war ever occurs again. One way is to provide aid, as in
the Marshall Plan.

The other way is just to pursue a policy of extermination -- kill all
the men and rape all the women.

However, I don't consider debt repayment to be high on the agenda at
that time, though it may be.

John