You got it! GBP/JPY! And if you've been reading my blogs recently you know what that likely means for tomorrow. After tanking to 153.5 around 9pm EST (market open for Asia) GBP/JPY is back to where it was during the peak of North America's bull run, over 154.5 and rising quickly to 155. This includes 3 very strong spikes up. I figure since Alstry and GoldMiningXpert are posting like crazy, trying to throw out every possible angle that the market will tank - which may or may not be valid considering that the SPY is still much closer to its lows than its highs over the past two years and there is nothing new about what they are saying (housing market crash, unemployment etc) so the stuff should be priced into the market already - I'll post a very simple fact that the bullish indicator of GBP/JPY in a currency market that is 100's times larger than the stock market is still very strong. [more]
This is a response to MattH42004 in my blog from last night. I figured on posting a new one so this doesn't get buried in that blog and more people will read it since I'm sure there will be interest. [more]
The Yen is taking a pretty bad beating especially against the Pound tonight, as it has all week. As I explained in a prior blog, the GBP/JPY is the most highly correlated currency pair to the stock market. During early trading today when the market was up, GBP/JPY was 153. As the market closed down, it sank to 152. But now its well over 153 and when it goes up it spikes a good 30 or 40 points in a heartbeat. [more]
I notice a lot of Americans have poor quality information when trying to access Canadian stock quotes...ex they use Yahoo Finance or some other site that has incomplete historicals, bad or delayed information and poor chart availability. I will provide some links here that I use frequently. I use the stock ZNC as an example. [more]
I'm a Canadian so its business as usual for me today. I love US holidays because some obsessed Americans make their way to our markets and certain stocks become breeding grounds for daytraders. [more]
I think the market will recover because the British Pound to Japanese Yen (GBP/JPY) is now over 149.50 and is near the highs of the week, recovering from the 148's earlier today when the market was at its low. GBP/JPY is the most highly postively correlated currency pair to the stock market. I like using currency pairs to judge the direction of the market since its easier to see technical patterns on them and its a great way to judge the market's appetite for risk as GBP is seen as risky and JPY is seen as a safe haven currency. [more]
As I logged in to Caps, I got this piece of work on FCX plastered all over my screen: [more]
I'm making a follow up to my previous blog because that one got out of control. The last comment I wish to follow up on is #38 from MichaelinWA.
"No fundamental reason for deflation?
How about tight credit, capital destruction, and massive deleveraging? Looks fundamental to me."
Perhaps I should have said no FURTHER fundamental reason for deflation. Tight credit and deleveraging are valid reasons. That's why something like CENX went from $80 to $5.50. But in between that it was less than $2 so people are taking their 300% return and running. Not a bad idea if you're risk averse or an older guy who just recovered his IRA and got his retirement back. I'm neither of those types.
The only reason for further deflation is if you expect further tightening of credit and further deleveraging. By the actions of Mr socialist president I find this very hard to beleive that it will take place. That would be against his entire socialist agenda of spend and debt, nor is he stupid enough to accidentally go against his cause ie like Bush and his record levels of debt despite being one of those fiscally conservative republicans.
As far as capital destruction, not sure what you mean. Capital is buildings, machinery etc. If those get destroyed you have to spend to replace them, a bullish indicator. I think you meant something else.
Then there is #27, the infamous chart where S&P earnings drop below 1935 levels. http://www.chartoftheday.com/20090515.htm?T. Its a beautiful, well timed piece of propaganda, similar to bullish propaganda that was bantering around in Oct 2007. There are a couple problems with it though:
1. It has no comparison to expectations. Apparently every company was priced to bankruptcy 6 months ago, so should that chart not be well into the negatives?
2. Earnings, like I said before are very leveraged. I'm sure there's a chart of Price to Book value that looks absolutely crazy cheap right now. If THAT chart was being copied and pasted onto my blog I might be a little worried about the bull run being over, but no its THIS one being pasted in so all the bearish sheep can feed off of each other.
3. I'm assuming this is net income and not EBITDA so its building in those billions of dollars of writeoffs from the banks that really should be normalised and applied to all earnings throughout the last decade and the billions of dollars of losses from deadweight like GM. For baseball fans, its kind of like Yankees being at the bottom in pitching ERA right now, but most of that is due to Wang. we know that the Yankees pitching isn't really that bad and their ERA should get better.
There's another group of bearish sheep that just annoy me...these belong to the whole group of Elliot Wave/1929 depression/the "big" boys just propped up prices so they can get out or sell bank stocks to raise capital at decent prices camp. These people all have this 2012 destruction/planet Nibiru/Illuminatti conspiracy theorist feel to their posts, rather than having their analysis based on rational thought. These theories make no sense, for instance isn't America's wealth distribution something like the top 5% own 50% of the wealth? So how are they propping up asset prices so they can all get out/sell stock to recapitalize and then leave the general public sheep holding the bag? It doesn't make any sense because the general public doesn't own enough capital to buy all the big boy's stuff. Even if the capitalist system did fail, the argument there is to buy gold and silver, not short sell the market. What good will your FAZ do if we are in an agrarian society where the US dollar is worthless?
One of the bears, goldminingxpert, went to my old blogs and made a point that I was a bear at one time. It was an attempt to undermine me as I was calling him out in my blog, but I think it just lends me credibility. Check this blog out where I said the DOW will be at 7500 for 2008:
I got a grand total of one rec, yet my blog was eerily correct for something from March 2007. I do not spout popular opinions yet the blogs prediction speaks for itself. My basic argument there was that the pigs were irrational idiots in a bull market, and now I predict the same for these bears. The things that I said in the blog happened and the sheep got slaughtered. Now that the sheep are fearful, or they are thanking their lucky stars that they made 300% on CENX or similar stocks and took their money and run, this is the perfect environment for the market to shoot up further. [more]
I don't post on here too often. But when I do, you have to admit I've made some good calls. Citigroup calls in the 1's, buying CENX while its tripled in price in a few weeks (I admit DTO has been relatively poor although still a gain), and since my bears are suckers blog the DOW has gone up nearly 1000 points. [more]
Now that the market is not looking so overbought, expect the bull market correction to move forward. There are far too many self righteous guru wannabees calling for the market to tank like a rock again for it not to go up. [more]