There is a big debate out in the world right now about inflation vs deflation, and who is right, and what it means for equities, precious metals, and stocks. I can see the governments of the world are printing huge amounts of money, which should be hyper inflationary, but collapsing debt structures are crumbling faster than they can run the printing press, and there has been a change in psychology around the world that will make it very difficult to reflate any bubbles, at least in the short term. I have run the numbers on $GOLD, you can all see it, it's a few days back. The likelihood for a bottom in precious metals somewhere in 2009 is what I think is probable based on the .250 nodes. The 1.00 nodes which are the second most powerful node after the .500 finishes way out there, like 2020 or so. The .500 nodes are fairly far out also. A bottom in precious metals that far out doesn't make sense to me.
So I could see the $GOLD price rise somewhere in 2009, probably near one of the three dates I have published, and this will be a sign of renewed dollar weakness, and that in turn, probably correlates to some sort of abatement in dollar based debt destruction. Hedge funds are being destroyed fairly quickly, although more have yet to fail in the short to intermediate term. When that process has ended, the dollar stops being supported by that mechanism, and assets will be under much reduced downward pressure (the pressure of forced liquidation by fund managers that have to raise emergency cash). This could allow equities to have a really decent rebound.
My assumption is that this process becomes visible next year, and this is my thinking behind my current interpretation of the Bradley dates.
There are some good comments on this subject on the previous post, worth reading.
Also I am open to other opinions, nothing is set in stone...
Click on the above chart to enlarge it...
1 comment:
I would like to comment about how can technical analysis account for the unexpected sudden death or illness of a guy like steve jobs. A sudden unexpected major lawsuit against a company. Even a unexpected earnings suprise on the downside..What about a takover offer for a company that nobody was expecting. I have nothing against technical analysis Although I remain skeptical about it but I do find it interesting to listen or read about it. I am at heart a fundalmentist when it comes to investing because I believe that invariably and in the end a companies stock price must at some point reflect the performance of the company. Their many stocks that have increased tremendously in value apple computer traded at just 5 dollars in 1998 today its around 400 dollars also petsmart stock traded at just 2 dollars in the year 2000 now its trading around 50 dollars a share theirs many other stocks but to many to list here. So you can still make lots of money buying and holding if you choose the right stocks
Post a Comment