By Thomas Henning
The Bilderbeast, through the central banking systems, has been plundering the world's assets. Now that the beast has won the battle, it's trying to prevent the debt laden Ponzi scheme, which was necessary to win the battle, from imploding. The beast is losing.
At this stage, the savvy player must recognize that the world economy, the old parasitic order, the Ponzi scheme is imploding. The player is in a naval battle and must realize that the battle tactics will be in constant flux.
Follow the markets only, because a lot of the old accepted rules will go by the wayside. The beast, as part of its death rattle, will spew forth propaganda, much of it, I suspect, the brainwashed fools who support the beast, believe. Disregard it.
Put on your helmets, strap on your life jackets as we start with the Rasbucknic.
In the last couple of articles, I've been looking for a Bucknic bottom, and so far that anticipation looks right. The Weekly studies have flashed buy signals, and the Bucknic has moved up.
The question remains as to whether the recent strength is an oversold rally or part of a larger wave pattern that is digesting the downleg from 2001.
Near term, the Weekly Hard Momentum has turned bullish, which tends to confirm the wave count as illustrated on the Monthly chart.
If this count is right, then a C-wave up has started, which should slop into summer before the anticipated Bucknic implosion evolves.
Weasel words: This count could get blasted to Hades if the recent lows are busted. We're in a naval battle here, and an enemy torpedo plane could get lucky.
The Euro (not shown) is running inversely to the Bucknic as various component countries have begun to implode.
This implies that these countries are in front of the Bucknic in the implosion line. The Bucknic Index is but a measurement of relative stink. The Euro simply stinks more that the Bucknic.
Humans have been beating each other over the heads with stone axes for thousands of years. Then the one-world central banker bilderboyz came along and devised the Euro, suggesting that everyone was going to be "palsy walsy." Now, the parasitic, hollow-headed helots are taking to the streets in strikes protesting austerity measures that try to rein in the "free" lunch as the Euro falls apart. This is only the beginning. What a farce.
Moving on to the gold. Like it or not, gold has been running inversely to the Bucknic. Much has been written about the divorce of the inverse relationship, but until that divorce happens, and I think that it will, the inverse relationship must be respected.
In past articles, the wave count has suggested that the III wave has started. While I've had doubts, I've labeled the upleg off of the 650 low as such. However, as suggested in the last article, the internal structure of the upleg off of that low has assumed the internal shape of a "B" counterwave. In addition, the gold stocks have not confirmed the gold's new highs, which also hinted at the possibility that the upleg off of the October low was a B-wave within a larger consolidation digesting the upleg off of the 2001 low. Silver has assumed the same corrective shape.
If this count is right, it suggests that a C-wave is starting to evolve, which will complement the A-wave as marked, and if correct, should slop down into mid-year. This formation is running counter to the Bucknic action. Do note that this count could get aborted.
In sum, the favored count suggests that a C downwave has started. New highs by the gold and XAU would abort this count and that would be okay too.
The bond market is in a major distributional phase prior to a cyclic decline, which will drive interest rates through the roof. The only problem is determining the shape of the top prior to the anticipated decline.
The Weekly Bond Chart shows that, barring some near-term strength, the bond wave count looks mature. A close below the lows at 111 or lower would constitute a breakdown, which would suggest that the world is running from U.S. Bonds. Higher rates will be a disaster.
The stock market is in the late stages of a bull cycle that started in August, 1982. The coming bear cycle should last about a decade. The bull cycle is still intact but terminal.
The Amex Index shows that the market bottomed in November and has legged up into what Gann called a failure or a tag-on rally.
Typically, tag-on rallies start after a severe #4 correction that has becomes very oversold. They usually look impressive and grind upward fueled by slop-over optimism that overlay from the previous bull move. Internally, tag-on rallies are usually not robust. They usually end suddenly and are always followed by major declines. They are 5th waves that commonly do not score a new high. No doubt the tea leaf counters reading this will roll their eyes. Roll away, guys.
Nearer term, in mid January, after a minor bearish Dow's Theory divergence, which was followed by a minor breakdown, the market corrected downward busting a bear wedge formation. The correction was most probably a #4 correction within a larger upleg and a 5th has started.
Going "mechanical" to confirm that uptrend the following levels must be busted cleanly. Dow 10,745.23, Transports 4262.66. Cleanly means that those levels must be busted on a closing basis by at least 1% and held.
To the downside, the critical levels are as follows: Dow 9908.39, Transports 3792.89. A bust of the lower levels would lock the Weekly Hard Momentum to the bear side and most probably suggest the start of the anticipated bear cycle having the life expectancy of about decade. Bye bye pension funds.
In sum, the Bucknic is probably in a C-wave consolidating the downleg that started in 2001, as the gold is probably inversely complementing the Bucknic action. Bonds are topping out needing a close below 111 to suggest the start of an implosion. The stock market is in a near-term top needing a breakdown below key levels to suggest the start of a cyclic bear market.
We are in the transitional phase from the old inflationary epoch into the coming deflationary implosion as the international debt laden Ponzi scheme implodes. The beast is thrashing in its death rattle.
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.
