My apologies for the late in the day editing of this blog, but I decided to change and expand the earlier version somewhat. Those who may have read it earlier in the day, may wish to re-read it to understand the important message it delivers.
Hello BBTL readership,
I had a few minutes this morning to post a chart update. It is self explanatory with our usual educational mark-up comments.
I have educated for many years following in the footsteps of the great W.D. Gann, R.N Elliott, and others. As they first educated and led us to the truth, the financial markets are NOT ruled by Ben Bernanke (nor any man), but rather are ruled and governed by Science, Natural Law and Cycles that frankly, are well hidden to much of the world.
Trust me when I say that those cycles are there. I have witnessed them in their simplicity and complexity. Perhaps read some of the paid client comments available here on the blog, or simply over time let the track record here speak for itself.
Since this blog just recently opened it has been bullish since day one, and effectively since the late-summer low of September 01, 2010.
Yes, there was a one day exception to that bullishness - yesterday. There on that day I predicted the cycle should change trend to down. I was using my Natural Cycles in that forecast. I also did that same forecast a full day in advance - without knowing what the FED would do.
Yet now, just one day later, I am bullish again. I explained this in yesterdays blog and I have taught the reasoning in this blog before. So for now I am bullish short term. Why?
It is due to my insights and knowledge into natural Cycles, and inverted cycles or inversions.
Elliott did not know how to explain these phenomena, so he simply called them wave extensions or wave failures. Currently in my view, we have now entered into a dangerous EW 3 extension. As these types of abnormal extended trends terminate, - they should not be merely considered as simply an overbought market - they become and are - extremely overbought with undesirable consequences.
Essentially, the FED and QE2 has managed to flip or invert an otherwise natural cycle yesterday (thus a cycle inversion), to now continue the trend up for a while longer.
They used the power of financial media, their usual FED-speak propaganda, the PPT, and what most are saying is about a $600 Billion future taxpayer liability, and the typical incessant money-printing antics of Ben Bernanke.
It seems no common sense anywhere in America can stop this powerful man, and the massive debt run-up and eventual liability he and America are accumulating. The past negative consequences of the incessant money-printing expansionary US FED has already cost America tremendous lost prestige and considerable real wealth in decline of their currency. Frankly, the primary fiduciary duty of any Central Bank is to protect their Nation's monetary unit. Yet no one, and I do mean no one, (other than Ron Paul, Republican - Texas and his few followers) seems to understand the coming consequences. What a shame that brilliant Americans such as W.D. Gann and today's Ron Paul seemingly lack a voice that can be intellectually heard - instead of being ignored.
Laissez-faire economists too, whom have a far greater understanding of natural cycles and economics, and the dire consequences of money-printing, have been telling the likes of Greenspan and Bernanke for decades to stop intervening in the economy.
Yet somehow these two FED leaders, their patsy banker followers, and their massive Wall Street fellowship of "I am rich and powerful and who cares" ego, has led to a near lunatic monetary expansion, in an effort to overly stimulate and create what should be easily seen as an artificial wealth.
The monetary bubbles that these two USA Central Bank leaders have thus manufactured, back to back are undeniable. More important, by my Natural Law financial education and forecasting abilities, I believe that society at large will soon suffer more inevitable pain from the continued and cumulative FED antics which must also lead to more ugly bubble-breaking and thus economic suffering again.
By example, the set-up for commodities like gold and others to rapidly unwind and deflate, and an inverse-like revolt in the Central Bank manipulated global bond market, now at all-time historically low interest rates - is indeed massive.
I educate by using many financial methodologies, but above all, I consider as the great W.D. Gann taught - Natural Law and Cycles - including those found in the stock market and other financial instrument cycles. I now say and predict that in the coming weeks and months, the equal and opposite consequences of this past artificial FED stimulus will begin to play out - in a rather harsh ending.
Essentially the FED and their latest QE2 action, is just another artificial monetary stimulus created by Man, that is intentionally interfering in a very tired and overstimulated natural economic cycle.
Today's money printing pleasure will invariably bring us deferred and equally bearish pain later. The natural cycle yesterday should have been down.
Man will reap that which he sows. If you sow to the wind, you will eventually reap the whirlwind. If you sow wisely, you will reap a bounty. This was the great W.D. Gann's message, as well as mine now, having followed in his enormous footsteps.
So what is being done now, in my view, - will soon become undone by nature. Why? Because that is exactly the way and law that natural cycles rule - eventually. Mother Nature can teach us the easy way, or if we are stupid and foolish - the hard way. One day Man and the greedy and foolish Keynesian economists of Wall Street will become wiser, as they slowly realize the far better way of the Laissez-faire economist. They will in the end, either the easy or the hard way - come to learn of and understand Natural Law and Cycles including financial cycles.
So, to lighten up the scenario and educate using another style of word picture, I am getting tired of the former Helicopter Ben moniker, and wondered about renaming Bernanke - as Whimpy?
Remember Whimpy from the olden golden Popeye days?
He was the fat and lazy friend of Popeye, who was always trying to take the fast and easy way out.
Like fat-cat Bernanke and his prankster-bankster friends, Whimpy too was always deferring pain until later. Whimpy was essentially cheating, by thinking he could somehow avoid paying the price.
Remember the famous saying of Whimpy - "I will gladly repay you Tuesday, for a Hamburger today"?
This is exactly what Ben Bernanke did yesterday. As a result, just like a free hamburger, we will have immediate short-term pleasure, but an even bigger pain eventually coming down the road when the costs must be paid .
By my ongoing cycle accounts, I say now you will not have to wait long for evidence. Look at my wave count if nothing else.You had better get prepared for the coming financial whirlwind.
This morning, the market gapped up and then, within seconds trended exactly to the 1209 level mentioned yesterday on the blog - all in the first minute this morning. I am sure Ben Bernanke felt pleased as he swallowed and chewed on his hamburger.
The fact that the SP500 index has now gotten through the 1209 level immediately is significant and sets up a new time and price target - shorter term. At least until Whimpy starts to feel indigestion (coming EW four).
For Elliott Wave enthusiasts, it means we are now in a Wave Three - extension. For the bulls these are like a deluxe hamburger - and better yet - in this case a free deluxe burger.
More on the coming side effects later, but for now, the new price target I am using is the SP 5900 level of 1228 - 1232 which is slightly higher than the previous yearly high last April. Double tops usually get taken out by a minor amount. If we happen to get above that level which at present I do not forecast, it will become potentially more unstable and dangerous. That is what is called a runaway market. These are insane markets built on fear.
Alas - but Gann gave us an even greater clue. Time is the master control factor. Cycles work not by price - but via time. Assuming my time cycle calculation are correct (and I think they are) November is going to get very interesting.
We may even get a whirlwind.
See the chart below.
Lesson Learned - Remember, borrowing today for your Hamburger purchase as Whimpy and Bernanke mentality seem to think they can, will be painful later.
For now consider the very-short term trend is higher - by way of a cycle inversion, or expressed as in Elliott Wave lingo - an Elliott Wave Three Extension.
Again, these do not usually have happy endings. As implied, the deferred pain will come in this case - sometime just days later. So, enjoy that burger and also the ride up now to about the 1228 - 1232 level, as it will take at least a few more days to digest. After all it was a deluxe burger.
But then......to be continued (hint EW 4)
Sincerely,
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
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