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November 2013 | Elliott Wave Analytics

  • China Gives Thanks For Cheap Gold
    By on November 30, 2013 | No Comments  Comments
    Just a quick update on China’s gold imports, which continued at extraordinary levels in October. To put the 131 tonnes in perspective: Until recently there was an agreement in place that limited European central bank gold sales to 400 tonnes per year, because any more than that was seen as disrup...
  • NYSE Margin Debt Hits Another Interim High!
    By on November 28, 2013 | No Comments  Comments
    The New York Stock Exchange publishes end-of-month data for margin debt on the NYXdata website, where we can also find historical data back to 1959. Let’s examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter. ...
  • 5 Things To Ponder Over Thanksgiving
    By on November 28, 2013 | No Comments  Comments
    With the “inmates in charge of the asylum” during this holiday shortened trading week is seemed to be an apropos opportunity to share a virtual cornucopia of topics to consider while enjoying the delicious delicacies, and subsequent tryptophan induced comas, of a traditional Thanksgi...
  • Is The Housing Recovery Over Already?
    By on November 28, 2013 | No Comments  Comments
    The latest report on housing starts, due out this morning, was delayed due to the government shutdown. It’s not a good time for that to happen given the rising concerns lately that the housing industry, so important to the economy, may be slowing, perhaps even from another bubble already. The repo...
  • US Housing Recovery: It’s Different This Time (No, ...
    By on November 27, 2013 | No Comments  Comments
    In my bi-weekly missives I usually discuss a topic germane to financial markets. This time around I’m going to throw you a curve ball and discuss the US housing market. We know the mortgage markets and housing itself were very much the locus of excess in the prior cycle and in very good part respo...
  • 30% Up Years: The Case For Cashing In!
    By on November 27, 2013 | No Comments  Comments
    Last week I posted two articles (see here and here) discussing the potential of a 30% increase in the markets over the next two years, as proposed by Jeremy Grantham, due to the ongoing monetary interventions by the Federal Reserve. Specifically, I stated: “The primary reason that stocks are l...
  • Inflation Is Raging – If You Know Where To Look
    By on November 27, 2013 | No Comments  Comments
    Most people – certainly most governments and economists – define inflation as a general rise in prices. But this is wrong. Inflation is an increase in the money supply, of which a rising general price level is just one possible result – and not the most common one. More often, excessive money ...
  • Ben’s Rocket to Nowhere
    By on November 27, 2013 | No Comments  Comments
    Herd mentality can be as frustrating as it is inexplicable. Once a crowd starts moving, momentum can be all that matters and clear signs and warnings are often totally ignored. Financial markets are currently following this pattern with respect to the unshakable belief that the Federal Reserve is re...
  • China: When Are Markets Rational?
    By on November 27, 2013 | No Comments  Comments
    Last month’s award of the Nobel Price in economics set off a great deal of chortling because one of the three recipients, Eugene Fama, received the award for saying that markets are efficient at capital allocation and another, Robert Schiller, received the award for saying they are not. Typical...
  • The Market Is Not In A Bubble.
    By on November 27, 2013 | No Comments  Comments
    Bubbles are rare events. There have been 25 bear markets over the last 110 years, or one on average of every 4.4 years. Their average decline was 36.5%. The ten largest declines averaged 49.9% for the Dow. Only three, perhaps four of the 25 were considered to be brought on by bubble conditions. In ...
  • Apple Losing Tablet Wars To Android, And Itself?!
    By on November 27, 2013 | No Comments  Comments
    Below are additional observations regarding Apple’s most recent earnings announcement. Please pay particular attention to the new video content. [youtube]http://youtu.be/fMZDokHYwQI[/youtube]   Quick chain of events: I explained the business strategy behind the iPad designed to allow Ap...
  • Market Health: Momentum Signaling Pause Ahead
    By on November 27, 2013 | No Comments  Comments
    The S&P 500 hit another milestone this week by closing over 1800 for the first time. The Dow Jones Industrial Average also hit a milestone by closing over 16,000 to end the week at 16,064.80. The NASDAQ also finished the week on a positive note and remains less than 10 points away from hitting ...
  • ECRI Recession Watch: Weekly Update
    By on November 27, 2013 | No Comments  Comments
    The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 132.2, up from last week’s 131.0 (revised from 131.1). The WLI annualized growth indicator (WLIg) to one decimal place, rose to 2.4, up from 2.2 last week. Last year ECRI switched focus to their version of the...
  • China No-Longer Accumulating US Dollar Reserves
    By on November 27, 2013 | No Comments  Comments
    China recently dropped an absolute bombshell, but it was almost entirely ignored by the mainstream media in the United States.  The central bank of China has decided that it is “no longer in China’s favor to accumulate foreign-exchange reserves”.  During the third quarter of 2013, Ch...
  • The QE Economic Miss and Future Valuation Overshoot
    By on November 24, 2013 | No Comments  Comments
    In yesterday’s post, I discussed why I agreed with Jeremy Grantham’s recent prognostication that stocks could rise another 30% from current levels. That agreement was not from some fundamental valuation story, as there is not one currently, but from the standpoint that a continuation of ...
  • Why The Fed Is Backed Into A Corner
    By on November 23, 2013 | No Comments  Comments
    The minutes of the Fed’s last FOMC meeting, released this week, confirm that the Fed believes it must begin to taper back its stimulus soon. At this point, the longer QE continues the greater the risk of asset bubbles forming, the bursting of which would destabilize the economy and make it even mo...

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