By Thomas Henning
Like Gary Cooper in the great Western "High Noon," the savvy player must gun sling his way down the MGM Western market streets shooting at "da bad guys" when they pop their heads up. Like Gary Cooper, the savvy player must not inhibit his thinking with any preconceived Fed babble, for to do so would be paying homage to the death throes of the dieing Bilderbeast - to the imploding Ponzi scheme. In order to profit, the savvy player must try to exploit market trends that reflect the implosion as they develop.
The bond market is in the terminal stage of a bull cycle that started in August, 1982.
Near term, the terminal final leg is evolving as suggested in the last few articles. The upside action has been nothing short of putrid because nobody wants the bonds that are being peddled by the Bilderbeast to pay for their failing totalitarian hustle.
When the bonds fall below the 114 and 110 levels, rising rates will bust every financial balance sheet known to mankind.
Let the firmness play out. When critical levels are busted, strap on the bond bear suit and get set for higher interest rates. That should be fun
The Rasbucknic Index, in spite of the whole world looking for an implosion, looks like a bottom. The daily studies have moved the Hard Momentum bullish and, to give comfort to the Bucknic bulls, the Weekly studies, which have flashed internal buy signals, must close above 79 to move the Hard Momentum bullish.
Conversely, the Euro and Swiss Francs look waved out upward and various sell signals have begun to flash.
Do understand that the Bucknic downtrend must be respected until a weekly buy signal flashes, but an upside move by the Bucknic would harmonize with the developing downside juke in the gold complex.
The gold complex is in a cyclic bull market that started in 2000. The favored count suggests that the primary III wave has started with the 2 of the III not done, and with a C-wave down probably in the cards. Backing up this concept are the technical studies that have flashed sell signals after gold bumped its head on the upper Weekly Bollinger Band. This outlook harmonizes with the bearish COT numbers that suggest that the commercials are very short.
The underground chatter suggests that the boys playing this COT game are going to get squeezed, and I don't doubt that this will happen. The question remains as to when it will happen.
Obviously, the Asians have a belly full of this gold manipulation game, given that they have started gold trading centers in Asia and physical gold is being shipped from the U.S. and London centers back to the East. Simply put, the Asians are thumbing their noses at the COMEX, and if they're doing this with the gold, no doubt their attitude regarding the Dollar and Bonds is analogous. Meanwhile, rightly or wrongly, I'm assuming that the COT numbers are indicative and harmonize with the technicals, which suggests downside action to complete the suggested C wave.
Keep perspective here. We have cyclic bull market in gold, so play it accordingly.
In the last article, I outlined a favored stock market wave count suggesting that the bull cycle that started in August 1982 was still intact and that the upleg that started last November was a terminal move within that cycle. I suggest that you review that article. For perspective, I modeled out the favored wave count as illustrated on the Amex Index, which, so far, harmonizes with the internal characteristics that are intrinsic to this type of move.
To summarize the technical action before the upleg began, the market became very oversold. The terminal upleg was accentuated by the bull cycle which started in 1982. This set-up sustained the market to the upside, but overall internal indicators, while turning bullish, did so reluctantly, which is typical of a terminal 5th wave.
Near term, the model, as illustrated, suggests a severe corrative #4, which should be followed by a 5th slopping into year end. Harmonizing with the model, a minor Dow's Theory divergence developed as the Transports did not confirm a minor Dow high on September 22nd. This was followed by a breakdown on September 24th by virtually all averages and breadth, along with Daily Hard Momentum suggesting that the anticipated #4 correction has started. Message: so far the suggested model is being validated by the immediate market action.
The model calls for the probable correction to be severe and should slop down into November. This should be followed by an upward 5th wave slopping into year end, if, if, if the model is right. Do remember that the model is drawn from sake of perspective only. One makes or loses money from market action not models. So far this model seems to be okay.
In sum, the Rasbucknic action suggests a bottom and the gold market is in a correction. The bonds are in a sick, feeble terminal move as the Bilderbeast is trying to unload them to try to keep the Ponzi scheme alive. The stock market is in the terminal wave that started in 1982 and that should terminate roughly year end. The real bear cycle is scheduled to start at that time.
Do remember that a cyclic implosion is evolving here and it is important to stay open minded and respond to the market action, which will only define the form of the implosion.
When the central bank hustle was started, individual countries ceased to exist as nationalistic entities. They only exist to be plundered via taxation, inflation, and theft.
The big move has been on to create a One World Order. This concept has two major faults. Firstly, a controlling factor is needed, namely banks. However to gain control, massive debt and currency debasement was necessary. This debt/currency debasement torpedoed the economies that they were trying to control. The economies are no longer viable. Thus, the banks that are holding the worthless paper are insolvent; therefore, they have no control. Of course, they'll thrash, holler, pass the buck, and steal all they can through taxes and outright thievery, but his is only a death rattle. The controlling banking element is insolvent and is trying to control failing, debt busted economies on a national and world-wide basis.
The second flaw in the One World Order is that it goes against the territorial imperative, which has been part of the human condition since Adam and Eve. A One World Order needs a cohesive controlling force, a big boss. But nobody is the boss. Knowing that the whole shebang is caving in, the Asians, who have gotten stiffed with Dollars and U.S. debt and a manipulated gold market, are running away with their gold. Who can blame them? This is not a cohesive force; this is every man for himself, the territorial imperative.
Thus, the individual countries have been plundered to the point whereby one is reminded of Maggie Thatcher's statement: "The problem with socialism is that one runs out of people to pay the bill." When the March lows are busted after the current upleg is done, the asset implosion becomes complete. There will be nobody left to pay the bill.
Thus, the central bank One World Order will have plundered everything; but what they have plundered will be worthless, and the various economies will be stripped and non-performing. They'll win, but they'll win chaos.
As all of this evolves, try to be like Gary Cooper walking down the market street and stay open minded about how and when a market bad guy will pop his head up.
Editor's Note: Thomas Henning's column, "Musings of a Stock Market Curmudgeon," appears regularly in The Bull & Bear Financial Report, in both print and online editions.
