Friday, August 4, 2017

Bears Growling Loudly But Stocks Continue To Rise

US stock bears are growling loudly, but stocks continue to climb the wall of worry. The computer's advises ignoring them, but the majority won't stop until the Dow does the unthinkable by closing above 23,000 as economic conditions deteriorate in the second half of 2017 to 2018.

Interesting observations:

  1. The Dow's leadership, a trend driven by international capital flows that many can't or won't recognize, will become obvious as time passes (chart). For example, the majority is trained to believe the Fed pulls the strings on everything from the stock market to global economy. This is a false assumption.
  2.  The Dow and US stock trends are not extended in terms of TIME (table). BuT = 94. The average since 1950 is 75. BuST = 0.4, only slight above the cycle distribution's norm (BuST =0). Smart money gets worried when BuST climbs above 1 and 2. Bearish 'experts' are growling loudly because they're following opinion more than the message of the market.
  3. US stocks, bonds, and gold to a lesser extent are beginning to align. Alignment that will soon include the US dollar will not only turn widely-accepted economic theories upside-down (invalidate them) but also portfolios of investors that adhere to them. Herbert Hoover’s characterization of capital flows (gold and reserve deposits) below highlights the power of the coming alignment which few understand or view as important.

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Headline: Volume 3: The Great Depression 1929-1941. The Macmillan Company, 1951.

During this new stage of the depression, the refugee gold and the foreign government reserve deposits were constantly driven by fear hither and yon over the world. We were to see currencies demoralized and governments embarrassed as fear drove the gold from one country to another. In fact, there was a mass of gold and short-term credit which behaved like a loose cannon on the deck of the world in a tempest-tossed era.



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.