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Friday, January 30, 2004

Well, a popular theory states that market action in the month of January sets the tempo for the rest of the year. If this saying stays true this year then I would already like to congratulate R.N. Elliott and Mr. Prechter for showing me the light.

As I am writing this, the three major indexes are in negative territory, not only for the day, but for YTD. True it has only been a month, but it seems the wind has been taken out of the market sails. Following the counts of several Elliott websites, and trying to keep a handle on the market myself, I see the markets falling a little farther to satisfy the counts, and then rising briefly for the final wave 5 of 5 of 5. Then...
I would like to say I know the answer. But of course I don't. But I would say, hold on to your hats. At the very least the next 5 years are going to be a very violent time financial.

I have been trying to put what has been happening into a global perspective and until I read this I was a bit confused. The idea of global outsourcing has been all over the media recently (I get my dose on cnet.com). But a quote from seems to put the situation in perspective finally.

>What neither Greenspan, Bush, Roberts, Schumer or Herbert
> know is anything. How many jobs would be outsourced if
> America had to settle its accounts in real money? How many
> foreigners would find employment in overseas factories if
> the Fed had not cut rates and lured Americans into a
> spending spree? What is the net effect on U.S. prosperity
> of cheaper imports... do lower costs offset lower earnings?
> Why is it better for an American to earn $25 per hour than
> 25 Indians to earn $1 each; why do Americans deserve more?
> What will happen when the whole fraudulent system blows
> up... and Americans are left with debts they can't pay... and
> foreigners are left with mountains of products and no one
> to sell them to?

And finally, the Super Bowl will be played out this weekend 040201. Besides the Tour de France, I would have to say it is the biggest sports spectacle I know of. Ofcourse, like many other home viewers, I'll be watching mostly for the commercials. When you consider that a 30 second spot costs roughly $2.5mm, maybe we should get ABC and the NFL to run the country. $5mm a minute? For a bunch of talking Chameleons and other nonsense. Well, who am I kidding? I'm just as ammused as the next guy.

Have a great weekend.
GO PATS!

Thursday, January 29, 2004

So the FED came out today and said they will be "patient" with the FED Funds target rate. It seems almost immediately that analyst all over Wall Street agreed that the first interest rate increase will be this summer, probably around June. While this may very well happen, I think these analyst are missing the bigger picture. It really doesn't matter when the FED changes the rates. Only that they will eventually be forced to. And by then, social psychology will be at a state when it doesn't really matter. The waves continue to wall into place. I find it interesting though, that a rough estimate of the end of wave 3 will be sometime around this June "deadline" if you will. I see the markets staying up until about that time, or perhaps into mid summer, before taking yet another dip into an ABC correction, and then one final push up to the end of wave 5.

It looks like we are in for a wild ride in 2004.
I'm just watching the counts as they unfold and preparing myself for what is to come.

good night.
jasonK.

Saturday, January 24, 2004

So after a little more reading yesterday, I was convinced that the market had already entered into a bear market, and perhaps I was already a little too late. But then I stumbled onto http://www.elliottwavemarkettiming.com/. This seems to be an acurate labeling of the current position of the market. I still have to validate their analysis for myself, but if they are correct then it appears that we still have some time before the real bear market (read:crash) hits. The site's analysis shows that we are bascially in wave B of the ABC pattern of the correction. If this is true, then we should shortly see a downturn in the three major US indexes to end wave 4. From there we should enjoy another rally to the end of wave 5. Although, this final wave (5) should be relatively short. And then from there... a very tough bear market.

Also, I've been reading posts from www.dailyreckoning.com. The posting "At least don't buy bonds". These guys are very bearish. They have made some very interesting comments about the economy in general, but especially Greenspan, the FED, the glut of US borrowing (credit), commodities, etc... Though they seem to think the "crash" is coming sooner than most, they do indicate that the FED is pretty much stuck between the proverbial "rock and a hard place" with regards to inflation/deflation/money supply (M3), and consumer spending.

More to come.
Be on the look out though, we are not in a new 'real' bull market. I don't like to make definitive predictions because that is usually the best way to get yourself in trouble. Yet, I am sure of this.

Be well.
jasonK.

Friday, January 23, 2004

So, the Q's followed a very predictable Elliot Wave pattern yesterday.
http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=qqq&time=&freq=

Today the pattern continued with what appeared to be an extended 2nd or 4th wave.
Either way, the Q's are definitely in a short term downtrend, if not a long term one.

I've been reading "Conquer the Crash" by Robert Pretcher and his analysis of the market is very convincing. I'm starting to believe that the US will experience a bad crash very soon. Pretcher said it would happen in 2000, and it did... almost. The problem was that the market staged a turnaround, highlighted by the runup from March to December 2003.

I am, and I am suggesting the idea of positioning money for another downturn. Obviously I can't say when it will happen, but I am thinking this year, probably after the election. So enjoy your short term gains now, and by mid summer put your money in a savings acount. True it won't grow much at all, but at least you won't lose. IRA (Mutual funds) can be put in short term investing vehicles such as T. Rowe Price's Prime Reserve account. There are no tax or withdrawl implications by moving your money to such a fund, unless the fund the money is coming out of has redemption fees.

I won't appologize for being bearish, but that's my take right now.
I'll post a more detailed analysis of the Q's over the 040122 and 040123 later today.

Thanx for reading!
jasonK.

Thursday, January 22, 2004

This will be the location of my new blogger account. Read if you like.

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