By Thomas Henning

       Answer: 1. A cohesive international banking system is an absolute necessity for the One-World Order. 2. The Bilderboyz will do anything to save it. 3. They’re failing.
        The details of the failure are irrelevant. The only thing that matters is to be aware of the failure and to profit.
        Let the central bank gang kick the can down the road to maintain their mythology. Instead, watch the unsalable reality of the markets. The savvy player wins or loses in the markets. All else is noise.
        The bond market is in the terminal phase of a cyclic uptrend that started in August, 1982.
        Near term, the terminal upleg is marked as being in the 5th wave of an upleg that started last April. If new highs are scored, there is virtually no hope of confirmation by the failing internals as shown at the bottom of the chart. While the wave tea leaves suggest that the upleg should last another month or so, a clean close below 135 would suggest the start of a cyclic bear market.
        Of course, one must understand that the Keynesian fools, believing their own bull manure, are long, leveraged up to their butts 20, 30, 40, 50 to one? One market burp against them and it’s busto time. If you doubt this, take a look at a recent bankruptcy by a big brokerage firm, run by a well-known personage. Of course, one can cash in on the counter derivatives: Ring. . .Ring. . . Ring. . . Ring. Golly, gee, no one is answering the phone.
        Meanwhile, the word around the underground suggests that Blackbeard Benny is going to buy up another batch of mortgage-backed garbage to keep this hustle alive. Do I smell panic here? If one wants panic, wait until that 135 low is busted. When that happens, I’ll change our hero’s name from Blackbeard Benny to Busted Benny.
        The Rasbucknic’s rally has come in as anticipated in the last few articles.
        To recap, the V downleg from the mid-2010 high, which was a IV of a larger wave sequence, should have 5 waves within it, as suggested by the illustrated count. (See Monthly and Weekly charts.)
        Nearer term, the aforementioned anticipated rally is most probably the 4 of the larger 5 of the V. Within that 4, an A,B,C, up, down, up pattern appears to be forming with the upside C wave presently in gear that should slop up to the 80 plus level if the usual form is followed. If this evolves, Weekly Bearish Divergences by the Weekly internals (not shown) will set up the start of the 5th of the V. This downleg should carry down to the mid-60ish level.
        The Monthly chart shown below the blown-up V of the Weekly is suggesting that if this count is right, and the 65ish level is reached, Monthly bullish divergences could evolve, which would suggest the completion of the major downleg and the start of a major bull move in the Rasbucknic. In all probability, this is when deflation gets into high gear. Of course for this to happen, economic conditions would have to evolve to change the Rasbucknic back into the Dollar. Obviously, at this stage, this evolution is a fantasy trip on my part, but to stay ahead of the game, sometimes this road is necessary.
        As Keynes suggested, “We’re all dead in the long run, but we have to eat in the short run,” so let’s go to the table to “lunch up.”
        Assuming that the 5 of the V evolves downward, what does this imply for the other markets? Firstly, gold will probably go through the roof as the Rasbucknic tanks. Secondly, the bond market will have completed its terminal up move and started a cyclic bear market, catching Benny and his parasitic cohorts with a load of garbage that they can’t unload. Of course, much has been written about Blackbeard Benny foisting off his junk onto the Zombies through their elected bozos. However, I wonder if this will happen given the chaos factor. We’ll see.
        Weasel words: This model could get busted, but so far it’s working.
        The gold complex is in a bull cycle that started in 2000.
        After a major correction that bottomed in 2008, the complex has legged up in a V-wave upleg as marked on the Gold Bugs Index.
Near term, the Index has moved in a consolidation for the past year. The favored count is illustrated within the confines of an Elliott Wave Hell. Note: Truth: this count is subject to change.
        Ultra-near term, the slightly-favored count suggests that the correction is over, as the Hard Momentum has turned bullish along with very bullish C.O.T. numbers in both gold and silver. The gold stock On-Balance-Volume numbers are also bullish.
        To confirm the start of the major upleg, the GDX has to close above 68, confirmed by the metal above 1925.
        It is common for a market to move into a consolidation under major highs after an upleg that started from an extreme corrective low. I suspect that this will happen in the gold complex especially if the Rasbucknic moves into the anticipated upleg to the low 80 area.
        No matter. I’ve been droning on about the battle plan, which remains: Don’t get cute and trade this cyclic bull market. It’s the only way you can mess it up.
        The stock market is in the terminal stage of a bull cycle that started in August, 1982. What is inferred is the start of a bear cycle having a life expectancy of about a decade. Overall, this expectancy harmonizes with the broad overall implosion of the debt monster.
        In a more practical vein, the market topped out with a Dow’s theory failure, which was followed by a breakdown as illustrated by the comparative lines on the Dow/Transport chart.
        Near term, in the last month’s article, I noted that the breakdown in early October was marginal, and a “tag-on” rally may be in the cards. Gann called these “failure rallies.”
       The “tag-on” rally did indeed evolve. For you wave counters, the favored call is that the decline that ended in early October was a 4 correction within a larger bullish formation, and the “tag-on” was a 5th, completing the larger pattern, which I strongly suspect is the terminal phase of the bull cycle preparatory to the start of the coming bear cycle.
        The tag-on assumed the usual characteristics of starting suddenly, looking impressive on the surface, driven by a diminution of supply without an appropriate increase in demand, and riddled with the cancer of putrid internals.
        While the rally can continue further, and it must be respected only because it exists, a downside breakdown below the October lows would be in harmony with the wave construction and the bearish Dow’s Theory configuration.
        A close below the higher late October/early November lows of Dow 11,950, Transports 4885, would constitute a very bearish early warning.
        In sum, the market upleg looks terminal, but must be honored. However, given the bust of key lows, head for the bomb shelter because a bear cycle is implied.
        The One-World Order Bilderboyz are in a jam. The two elements that they need to succeed are a central banking system and a cohesive force that denies the territorial imperative, which denies intrinsic human nature. Now that the debt is imploding, their banking system is falling apart and the cry of “Every man for himself” can be heard. Hello reality.
        Let the Boyz kick the can. Let the Zombies wallow in mythological LaLa Land. Meanwhile, watch the reality of the markets.
       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.