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May 2013 | Elliott Wave Analytics

  • Is Oil Cheap?
    By on May 31, 2013 | No Comments  Comments
    Gasoline is expensive at the pump, but by one measure oil is cheap and poised to go higher. I recently posed this question to longtime contributor Harun I.: could global hot money flow into the crude oil market, driving the price up even if demand declines? The basic idea here is that if equities, ...
  • Are We There Yet?
    By on May 30, 2013 | No Comments  Comments
    Vitaliy Katsenelson is a modern-day American success story, the kind we need more of. He grew up in Murmansk, in the extreme northwest corner of Russia, north of the Arctic Circle and close to the Finnish border. He says he barely escaped a career in the engine rooms of Russian Navy vessels when his...
  • Evaluating 3 Bullish Arguments
    By on May 29, 2013 | No Comments  Comments
    These are indeed interesting times that we live in.  As the markets elevate higher on the back of the global central bank interventions it is important to keep in context the historical tendencies of the markets over time.  It is not uncommon at major market peaks to see“irrational exuberanc...
  • Monthly Strength Period More Important This Month?
    By on May 29, 2013 | No Comments  Comments
    The market has a quite consistent long-term pattern of being positive for a five or six-day period beginning near the end of each month. We refer to it as the ‘monthly strength period’. On average the market tends to make more than half of its gains each month in those five or six days. It’s ...
  • Japan: Market Top or Entry Point?
    By on May 29, 2013 | No Comments  Comments
    This year foreign investors have plowed almost $80 billion into Japanese equities, which have been leading global markets. By Wednesday, May 22, the market was up 46% year-to-date.  Suddenly late last week the Japan market tumbled, with the Nikkei falling 7% on Thursday, May 23rd. This was the larg...
  • Rydex Ratio Reflects Very Bullish Sentiment
    By on May 29, 2013 | No Comments  Comments
    As prices soar, the Rydex Ratio reflects increasingly bullish sentiment. The chart shows that the Ratio has not reached these levels for over 12 years. ————————– (This is an excerpt from recent blogs for Decision Point subscribers.) Click here ...
  • US Markets: Is a Two-Day Decline All That Important?
    By on May 28, 2013 | No Comments  Comments
    Gentle Ben made noises about beginning to take the punch bowl of stimulus away, and just the thought of it spooked markets around the world. Well, for a day or two anyway. At least it gives pundits and columnists something different to talk about and debate. For four weeks it has been boringly one-s...
  • Bond Vortex In The Works?
    By on May 28, 2013 | No Comments  Comments
    I got an email from a friend who runs money for a hedge fund that got my interest:   may want to take a look at convexity vortex in mbs market and implications…   “Convexity vortex’? What’s that about? A bit more from this fellow, I’ll call him ‘MP’:   Some familiar wi...
  • Japan: The Mother Of All Painted-In Corners!
    By on May 28, 2013 | No Comments  Comments
    I wrote several years ago that Japan is a bug in search of a windshield. And in January I wrote that 2013 is the Year of the Windshield. The recent volatility in Japanese markets is breathtaking but characteristic of what one should come to expect from a country that is on the brink of fiscal a...
  • Market Health Update: Long Term Outlook Still Bullish
    By on May 28, 2013 | No Comments  Comments
    Wednesday’s selloff proved to change the short-term outlook of the market as indicated by a reversal commonly referred to by technicians as a bearish engulfing pattern. Such a reversal is also corroborated in the loss of short-term bullish momentum as the percentage of stocks within the S&...
  • Deflation: The Real Worry For The Fed
    By on May 28, 2013 | No Comments  Comments
    In several of my recent missives I have made several references to the wave of deflationary pressures that are currently encircling the globe. In “Japan: A Few Thoughts On The Crash” I stated: “The unintended consequence of such actions, as we are witnessing in the U.S. currently...
  • More To Consider For Markets Than Just The Fed!
    By on May 26, 2013 | No Comments  Comments
    Fed Chairman Bernanke spooked investors with his testimony before Congress on Wednesday by indicating that the Fed could begin to withdraw the punch bowl of stimulus as soon as at one of its next monthly FOMC meetings. What? The Fed might abandon investors? Might remove the ‘Bernanke put’ and ...
  • Greece: Debt Still At 2010 Levels, More Time Useless
    By on May 26, 2013 | No Comments  Comments
    Greece was supposed to get it’s debt to GDP ratio to 100% by 2012, then 100% by 2013, then 110% by 2014. Now Jeroen Dijsselbloem, president of the Eurogroup finance ministers, says Greece May Get Still More Time to meet fiscal targets. And the alleged level of debt sustainability keeps ris...
  • France: Private Sector Implosion Continues
    By on May 26, 2013 | No Comments  Comments
    Here’s some news that caught my eye earlier today when I was on the road: The Markit Flash France PMI® shows French private sector output continues to fall at marked rate in May.  Key points: Flash France Composite Output Index unchanged at 44.3 Flash France Services Activity Index uncha...
  • SPX and NYSE Margin Debt: Signs of Vulnerability?
    By on May 26, 2013 | No Comments  Comments
    One of my economic correspondents, James Ross, called my attention to the fact that the NYSE has released new data for margin debt, now available through April. I’ve updated the charts in this commentary to include the new numbers – note from dshort. The New York Stock Exchange publishe...
  • Could Stocks, Bonds and Housing Decline Together?
    By on May 26, 2013 | No Comments  Comments
    About the claim that central banks will never let asset bubbles pop ever again–their track record of permanently inflating asset bubbles leaves much to be desired. The problem with trying to solve all our structural problems by injecting “free money” liquidity into financial Elites...

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