Hello Investors and Traders,
Global financial markets yesterday posted strong gains, and technically remained impressive again today as they gave back almost nothing.
The financial gossip yesterday attempted to explain the equity gain by spinning USA data and discussing Japan's surprise rate cut to virtually zero, and the news that Japan too was initiating more quantitative easing (like the USA).
Japan pledged to buy a trillion plus Yen in more government buy-backs of Japanese bonds, and a host of other fixed income assets (inflation at all or any cost).
Our take on this is essentially to dismiss it as worthless news, more futile global expand-the-money-supply policy and "no surprise" in that the Japan and USA Central Banks and their monetary policy have been colluding for decades.
BTW - If you have not already downloaded and read the "Invisible Hand" document (the second document) on our Education page - we highly recommend that you do. Japan was actually honorable in that they publicly admitted market manipulation a long time ago - something the FED or USA Treasury or Canada have never done (so much for honesty and government transparency). Also, if we do not see downloads of our educational content, we are less likely to post new material.
Far more important, keep in mind that our core KRTT financial education strongly teaches and verifies that the markets move in harmony with trends and cycles. The market moved yesterday in accordance to the exact cycles KRTT has taught our clients.
As for today's education, included in this update are two excellent educational charts that both show the equity markets (at least for now) remain quite healthy for a continued upside trend.
The first chart displayed is the NYSE end-of-day TICK Index, and the second chart shows the SP500 Index with some powerful technical indicators.
So in short, for the bellwether USA SP500 Index and frankly, for most global stock indices recently, all has been smooth and so far, exactly in line with our KRTT call that the SP500 is currently in an all important Elliott Wave Five UP trend.
Generally, such waves often show a personality of actually heating up, as they go along, until eventually they terminate in complete surprise to most investors and traders sometimes by sharp reversals.
Some rarer five waves often end in near exponential upward curves - similar to that of the runaway crude oil market about two years ago, or recently in gold (hint). By the way, KRTT was then on record, of considerable warning that crude oil was dangerous and about to top at the time.
If we get enough requests left here on the blog in the comments section on this post over the next few days, we will consider covering the current gold market this weekend in an update, complete with some interesting analysis that will likely surprise many.
One last comment that we will make this evening before closing off, is to expect some interesting equity action over the next few days.
Depending on one's understanding Fib math or Natural Law, or at a basic level of technical analysis - draws even a basic trend line, one can spot that the SP500 level as of yesterday, has come up against another key important level.
By example the current SP500 price level by drawing a basic trend line, roughly connects to the all time SP500 record high in 2007 (1576), and also to the more recent 2010 April yearly high (1219).
Homework - Draw this trend line on an SP500 chart and ask what it represents when breached?
This trend line is thus an important one to watch and it may included on a future chart update.
If the SP500 can breech this trend line and current price level to the upside, it could become even more exciting, or typical to some of the rarer five waves as described above.
In conclusion for now, we remain decidedly bullish. Spot the trend and go with it.
(Markets are dynamic - all good research analysts, investors and traders reserve the right to change their minds).
Regards,
James Kelly Sr.,
Editor in Chief
www.KRTT.com
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