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Offline XXVV

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MARKET REPORT
« on: September 02, 2015, 09:26:37 pm »
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  • This is being established September 2015 at a fascinating phase both personally for the writer and also for the current state of the world financial system. It is a personal view especially of the New York Markets, through the eyes of an Investor. I hope to post  a few reports every week. The first will follow later today, based on trading 2 September 2015 where the DJI closed + 274 on the previous day close.


    Offline XXVV

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    Re: MARKET REPORT
    « Reply #1 on: September 02, 2015, 09:45:04 pm »
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  • One major adviser today called for cash out of equities because of concerns over continuing high volatility. So many others talk of buying into dips and event horizons of 5-10-15 years.  Others are concerned on income and look for dividend earnings. The majority of fund managers and experts interviewed at this time very much want 'normal' trading conditions to return.

    The underlying assumption is that the equity markets continue to grow and travel upward despite periodic corrections.

    There is a fundamental question here. If the markets did not continue to grow and perform in a manner that most investors could deal with, where would earnings, extra income flow from? And in periods of uncertainty and stress such as the coming phase, what will investors do? Will they stop investing?  Where can they turn? In coming weeks I will try to address some of these questions.


    Offline Tomla

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    Re: MARKET REPORT
    « Reply #2 on: September 03, 2015, 01:50:13 pm »
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  • xxvv ,, what do you think or envision is going to happen in financial markets worldwide during september and october?

    Offline XXVV

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    Re: MARKET REPORT
    « Reply #3 on: September 03, 2015, 10:57:00 pm »
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  • Thanks Tomla that is a great question.

    I try to take in much of the expert discussions through many media, and at this time a lot of focus on CNBC as a channel that provides some really intelligent views, along with RT.com, BBC, CNN, Aljezira, and Sky Business (UK and Australia).

    Also I have the views from my friends at M4 and also other organisations that are more private.

    Before I try to answer your question here is some context. My views are personal although I have assimilated and combined views from others who I greatly respect, admire and trust.

    Let me emphasise first that I am shocked and dismayed but not surprised at the 'migrant'/ 'refugee'/ exodus of people worldwide from black holes such as Syria, and other political man made disasters in Africa. This is a growing tide and is accelerated/ channeled through improved individual internet and mobile smartphone communications and overseen by improved global internet communications where many watch aghast as some politicians reveal just how out of touch and archaic are their views in the face of change. By this I refer particularly to the Hungarian PM and neighbours trying to stem a tide he does not understand. The great experiment of a Euro united without boundaries is being tested where 30 nations are being asked by France and Germany to responsibly share a collective burden of accommodating hundreds of thousands of lost souls.

    And to arrive in a Europe that economically is 'compromised' by Q/E ( in other words where the elite rich are wealthier and the rest slowly decline) with limited employment prospects means 'camps' or we had better find more suitable names such as new towns or havens or safe refuges. This is not the first time there have been streams of dispossessed or homeless, but the scale is now so much greater and the expectations higher, the challenge must be seen as an opportunity to turn this around.

    No longer can we make personal decisions that may not have international consequences in an increasingly wired and connected world. As a graphic example a 14 year old in UK sending a selfie to a school friend. As we say in NZ, nec minit, the Police are involved and his action goes on the public record for ten years on UK police files, and any future job interview research will be able to access his error of judgment - a bad choice. In many other cases the files are kept 100 years.

    We do need to be aware of the world as it is shaping and the great change forces that are at work, and then we must think things through.

    The above problems are man made. They could be a lot worse in scale.

    What of the implications of a natural disaster, of illness, of famine, or of earth forces such as storms/ tides/ volcanic or seismic activity. It may only be a matter of time before we are tested in this arena.

    I am not a disaster scenario doomsayer and in fact far from it but the trending of events is quite evident/ accelerating and there must be a major shift in our global attitudes to deal with these dangers/ risks/ care for one another.

    Many really do care and through private initiatives are seeking fresh ways to act, gather and respond. I will give some examples in future reports. It really is heartening when you see what is going on still relatively unknown and less publicised.  But for example aid agencies where there is much more efficient and effective distribution for the needy with less overhead; for medical, well being and shelter. These may need to be at the forefront of attention and action in the near future.

    Do they work for profit?  No, because there has to be another way of enabling such action and initiative. I cannot explain here how it can happen but it can emerge from re-distributed and re-prioritised 'profit' that emerges from the process of working with 'money'. Banks in their present form may change as it is clear to use Max Keiser's delightful expression, many are 'zombie banks' and will fall/ fail in coming years.

    I believe that over the coming cycle which may be 2-3 or 7 years or even longer, there will be massive changes/ failures to our financial system and the impact may be that we eventually learn to adapt and de-centralise to smaller more effective communities, although linked as a greater community but with a sense of more responsibility and of taking care of one another and those in need. I believe if we do not adopt this approach soon, by practice and initiative, we will be forced into such by necessity and sheer extremes ahead. That scenario may be a vision 50- 100 years ahead, sooner or later. We have to have a positive vision of what we want, where we are going, and some collective enthusiasm for positive change, rather than selfish ad hoc day by day drama on drama,  sleepwalking to nowhere.

    So back to the present.

    This week we have seen a relative calm on the markets after the shake ups of the past weeks.  That everything is connected becomes clearer day by day, and  the engine of the US markets is performing strongly but after 7 years of bull run has taken a correction and is pausing before the next phase. Some, noting the holiday season and low volumes are looking forward to a growth rally in October. Some are awaiting the interest rate hike/ delay by the Fed mid September. Some are stepping aside from the markets having exited the FANG stocks ( Facebook, Amazon,Netflix, Google). On a level market Netflix fell 4% today, and a collective view is that Google of course is the best of that bunch. Some are seeking small cap stocks by contrast and solar energy, some building, even Wal-Mart was recommended today as a Buy for a cyclic re-bound.

    So many of the CNBC pundits warm to the comfort of a bull market, of 'normal' trading, and become stressed and anxious when out of their comfort zones. We can sympathise but does that help us?  Many of the experts note the deflationary cycle and the commodity coolness, the precious metal hesitation, the currencies responding to a dominant USD trade cycle, and as with AUD/NZD a substantial slide in value through perceived worries over China reliance, low prices for iron ore and dairy, and USD dominance. They ask where do we invest for 'growth' then?  Yes that is the real problem because of risk exposures.

    One characteristic of futurist predictions, particularly  with regard to foreign currency movements, is that they are mostly wrong.

    All I can anticipate with confidence is change, and possibly challenging change, and the need to be prepared for such.

    Recall, I mentioned that 'triggers' can spark slides, and it may be that the next 6 weeks or so may see such.

    My personal view is to dig beneath the surface appearances of business/ market/ banking communication and try to access strong  and reliable professionals who can trade under any condition and thrive. It might be helpful to find those who have been through various meltdowns and crises, and learned from those experiences.

    This is where you need to conduct your own research and due diligence. I have been doing this  for three years in my area of interest, and in my notes have shared my leads.

    Lastly, refer to Harry Dent at Economy and Markets Daily. He has quite a reputation. He is predicting a Dow Jones level of 6000 and a major correction ahead - received his newsletter today.

    Current Dow Jones level is 16,374.

    Be aware of the chorus of voices and opinions. Handle a range of situations and just be prepared. For what it is worth look at football results and play the black swan events like ManU or Chelsea losing - both happened last week. Recall my references to the Economist Nassim Taleb who has called for cancellation of the Nobel Prize for Economics.

    Offline XXVV

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    Re: MARKET REPORT
    « Reply #4 on: September 04, 2015, 09:32:52 am »
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  • The extended interview this afternoon on CNBC with former Finance Minister of Greece Yanis Varoufakis was excellent and far reaching with links to the European crisis on migrants/ refugees, to European Q/E, and of course to Greece, recent past, present and future.

    Trouble ahead.  That is what I see and weeks, months, Greece will exit the European Union -  a superficial grouping of common currency but with vastly different internal values, cultures and attitudes.

    Within these two major issues alone are the sparks that may trigger the market collapse.





    Offline XXVV

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    Re: MARKET REPORT
    « Reply #5 on: September 04, 2015, 08:38:55 pm »
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  • Meanwhile, after today's -270 DJI, a long weekend ahead with the Chinese market open on Monday and Europe very negative - an unstable mix.

    Offline Tomla

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    Re: MARKET REPORT
    « Reply #6 on: September 04, 2015, 09:28:05 pm »
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  • To me its way easier to write a list of who is doing great economicly , politicly or doesn't have big big social issues.......nobody!!! It is starting to look like the world is recovering from WW3 but we haven't had that war yet

    Offline XXVV

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    Re: MARKET REPORT
    « Reply #7 on: September 04, 2015, 11:17:26 pm »
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  • Yes there is a lot of confusion. Just look at the spreadsheet cover of the CNBC Markets website today. Something for everyone, and in every direction, or just about the tower of Babel. Over the coming months I am going to try to provide some clearer views, and some directions through this mess, but this may take time. As with the roulette work my M/O is to think aloud and explore and share together, with a few off limits as well. I will try to be innovative and see outside the square where possible. Hint - start exploring and researching currencies that are largely asset based and under-valued. There could be re-valuations to come.

    One of the smartest Fund Managers on the NYSE floor today stated he had cashed up totally in the present scenario. He personally indicated this would enable him to benefit with larger buy opportunities from the next correction he saw in the coming weeks, with a major correction 2016-7. What he did not say ( so to not offend his host or audience) was that his smart move also covered him if with the multiple triggers from different world situations all clicked in the next few weeks big time. There is a lot of wishful thinking expressed, and a lot of pseudo science.  I like the way that CNBC employs several quite direct English 'economic journalists' ( what do you call them) so they act as the standard villains as per Hollywood caricatures, The villains often have Eton accents ( like the UK PM).*

    Disclaimer * - I (sometimes) talk like that too.


    Offline XXVV

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    Re: MARKET REPORT
    « Reply #8 on: September 06, 2015, 05:30:04 am »
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  • Sunday afternoon here.

    NZ is placed quite handily ( away from everybody else) and the international dateline zone which I can see just over the horizon from here ( Tauranga today) enables me to observe weekend US television and attempt to digest it all before the action starts tomorrow. I predict much action drama ahead.

    CNBC after all the verbosity of the week seems to chill on a Sunday with great golf in great locations. Seeing such mastery of many skills is soothing.

    However what I am about to tell you may be a further bombshell in the array of signals I have been attempting to focus this week. Why am I doing this? Well it is because I really sense that something big is going to happen in the next 2-3 weeks and I am trying to assist those who are prepared to take evasive and then further appropriate next action to benefit.

    M4 is a start, and they have a new endorsement within their frame which is pivotal.

    Harry Dent has much to say and for those who listen he recognises and understands patterns. By the way I heard one on the Investment Professionals on Wall Street on Friday define the work they do as 'Pattern Recognition'. For roulette players this is no surprise.

    The weekend summary on CNBC replayed highlights of the week and featured a chart analyst who is saying what I already intuitively feel is true regarding those rippling 7 year cycles, and the probable unfolding scenario we are about to enter.

    Let me say it again. Observe what the DJI does on September 14, then the 17th which by the way is the date for the Federal Reserve future policy announcement. There is a lot of conflicting opinion on CNBC over this. Then the 23rd. See what happens. What is certain is increasing volatility. Note those three dates.

    Also take a look at the charts of the DJI and NASDAQ over a span of decades. Observe the Bear Market phases. Human psychology positive bias tends to encourage us to focus on the steady or relatively consistent climbs, especially the recent 7 years. Look back at 1929 before and after and note the duration of the bear phase.

    Harry Dent of Economy and Markets is specific as to appropriate strategic  action, and I would recommend his current offers.

    The Barefoot Investor which is a conservative but extremely constructive and fresh Australian financial publication is highly recommended.

    Also I heartily recommend Motley Fool -Australia for their bravado in establishing their Million Dollar Portfolio ( for members) opening on September10.  In my humble opinion I would delay by at least a year or turn to some 'alternative' strategies. I will keep you posted on their story.

    Ah yes, I nearly forgot. Fat Prophets, another Australian wonder.

    All I am advocating is to get some context - recent, medium and longer term ( 100 years +), and learn from this so that the turmoil in the immediate future can be dealt with and even, with knowledge, specialised knowledge, can be used to your advantage.





    Offline XXVV

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    Re: MARKET REPORT
    « Reply #9 on: September 09, 2015, 08:26:25 pm »
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  • The volatility index ratio on the DOW is increasing and the dead cat bounce did its thing yesterday. FitBit currently at $32 USD looks set to hit $50, one of the highlights, as was a section on automated driving on CNBC. This latter is now and over the next 2-3 years will vastly accelerate with huge implications for safety, insurance and urban development strategies. The uncertainty over the Fed rate issue, the volatility in the Japanese market and the devaluation and re-direction of the Chinese markets all are inter-connected.

    As one experienced Trader mentioned, most private investors in the US markets are indoctrinated into a buy and hold strategy and seek to buy into market dips such as for example an entry into Apple stock between $103 and the present $110. This is not a wise approach at times like this and other investment models should be considered. This is one reason I am writing these notes to illustrate access to other ways, and in due course, I hope to be able to directly relate my personal experiences longer term.

    Offline XXVV

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    Re: MARKET REPORT
    « Reply #10 on: September 10, 2015, 07:54:11 am »
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  • As earlier stated we now await the triggers....

    So first we have Junk status credit downgrade for Brazil. 

    Offline XXVV

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    Re: MARKET REPORT
    « Reply #11 on: September 12, 2015, 12:24:50 am »
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  • Friday afternoon and NYSE closed with the DOW up about +100 on low volume trading. Everyone is waiting.....waiting for the next clue.

    The Fed makes its announcement on any interest rate hike on Thursday ( a minor adjustment upward) to signal that the US economy is moving forward and is several years ahead of the now increasingly common Q/E in Europe and elsewhere. Here in NZ the interest rate has been sliced and a further step down signaled ahead, in the economic doctrine of balancing stimulation in response to trending loss of confidence. As a consequence the NZD has fallen further in relation to USD, a fall of 30% in the past 12 months. And to many other nations dependent on the value of their international commodity value exports the imbalance, growing gaps in currency values may signal trouble ahead. The NZD had been 'over-valued' for a few years ( and this did not help exporters) and it related to our high interest rates on deposits, on prosperity and dairy/ commodity prices. That has all sharply corrected and according to one major bank here will slide another 10% yet before adjusting ( another 'educated guess'- most of which are wrong  when analysed after the event).

    So, the Chinese have re-valued down their over inflated RMB, and further adjustments will come for sure which will upset world equity markets.

    It is a world of bubbles and the various other bubbles, which like all past bubbles must collapse and correct. It is just that now in our 'wired' society, everything is perceived (not necessarily causally or correctly) as being 'connected'.

    So the Chinese currency management/ market management ( versus talk) is Trigger #2.  ( Brazil was Trigger #1)

    Trigger#3 is the evolving border crisis and lack of unified vision within Europe and the brave souls who cross dangerous international waters and boundaries to escape the madness in Syria, surrounding nations, the Arab spring implications and the extremists in Afghanistan and surrounding nations.

    Trigger #4 is Greece

    Trigger #5 is Russian involvement in Syria

    Trigger #6  the real estate bubbles in western cities and the vulnerability of the US housing market to another sharp correction.

    Trigger #7  is a cyclic timing/ phasing/ overlap of down cycles in a market fifth correction wave identified by Harry Dent et al.

    Right now it is the strange eerie quiet before the storm. Look for the signs.

    Offline XXVV

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    Re: MARKET REPORT
    « Reply #12 on: September 15, 2015, 04:27:25 am »
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  • What next?

    We are waiting.....

    Market appears to have covered either Fed choice.

    It is the Chinese markets that are spooking the volatility and oil price moving down.

    Waiting for a big trigger and as Sept 21 rolls around it is more likely/ volatile at this time. Of course I would rather no such event because they are all negative.

    I have no position, just observing.

    Offline XXVV

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    Re: MARKET REPORT
    « Reply #13 on: September 15, 2015, 06:24:20 am »
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  • After the sweet talking on CNBC ( and I have really come to enjoy and admire all the correspondents from throughout US, Canada, Asia, Europe and London) here is a little note from Ed Harrison who is a specialist Economics Producer on RT.com.

    He noted BIS ( Bank of International Settlements) warns against Fed interest rate hikes and that the metrics show that modification of monetary policy is not to be attempted. Key ratios of debt are so very high, particularly Brazil and China.

    It is suggested the debt ratios now exceed those prior to the past crash of 2008. Something will give way soon. Of course Max Keiser has been stating this, with his selected specialist guests, for the past 9 months.


    Offline XXVV

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    Re: MARKET REPORT
    « Reply #14 on: September 18, 2015, 05:59:49 am »
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  • Back after awaiting the Fed decision and I was personally very impressed by the Press Conference, the demeanour and knowledge of Janet Yellen, and the first question ( and her answer) from Steve Liesman at CNBC. He is a very professional economic journalist and put to shame some of the silly overstatements by others, in particular the Chicago Exchange CNBC correspondent.

    Please note the format and content of this my personal view market report. KLW has been very critical in particular of my style of presentation and editorial selection.

    Well, as he rightly acidly observes, this is a roulette/ bet selection / gambling Forum, and why one might ask is there a section on 'markets'. Well, my answer is that no-one else is doing it, and the recent definition by a top US Professional Trader that the NYSE and the financial markets in general are all based on 'pattern recognition' and analysis thereof, answers the question neatly. For what is bet selection other than the result of analysis based on pattern recognition of prior data. Certainly that is the way and why I play roulette.

    My personal position is as I have outlined elsewhere, an amateur in this field, although I am increasingly connected with those who are Professional Investors, and I can term myself truthfully, an Investor.

    For the benefit of KLW I would not dream of, or at all want to be writing in a Market Forum, as I am deliberately acting like a selective osmotic sponge and taking on board various views with which I resonate, and re-positioning this material, sometimes with due credit, in a Blog, for my own interest.

    Purpose of this material is to help me define and grow my ability to understand and communicate in appropriate meta-language/ jargon/ the obscure and specialised language of the markets.  In time, I hope to be able to have an intelligent conversation in this area. It is no different in principle to the meta-language of Architecture or Medicine or Property Investment.

    So to the patient reader, thanks for coming on this journey, and oh by the way, 'caveat emptor'. ( The same principle applies to what they term 'the housing ladder' in the UK).

    The Fed decision was accurately foreseen by the brilliant 'King of bonds'  Jeffrey Gundlach at Double Line Funds who was interviewed this morning from his Los Angeles office. He was a very impressive speaker who reads the signals fluently.

    No signs of a crash yet. Lets see what happens on 23rd September.