Market Mavens and Financial News are Often Wrong
The update tonight is straight forward, short, and largely reiterating my ongoing short-term equity market caution, in spite of the nominal advance in USA stocks today.
Again, I caution that it is futile to follow the daily financial news, or to put too much emphasis or faith into the stock market action of a single day. This is truer when the price move is small (an inside day) and on low volume (which suggest mere volatility).
On the other hand, when prices breakout strongly from a previous trading range, and do it on massive volume such as in the case of Eastman Kodak today, there could be a lot more happening in the forensic price and volume clues.
What I am suggesting is that by watching for high volume large price increases, it has far more trend significance than the financial news. Ask yourself, what was the huge financial news in Kodak today that caused the huge price move in Kodak on multiples of normal volume?
By example of useless and distracting media noise, the recent Obama announcement of the ongoing tax haven hiatus, or more handouts to the unemployed, have led some USA economists and many media sources (including financial behemoth PIMCO) to suggest this is a very welcome stimulus beyond a mere monetary carrot, that potentially is a game changer for the economy, indicating more robust growth ahead.
The financial media while looking for the hot story daily, instead of understanding the real trend truth of Natural Law, or being alert to tired trends and cycles, immediately determined the Obama announcement is why USA bonds fell so sharply in price this week. Bond prices always go down (and yields up) on strong economic news, or particularly higher inflation, - right?
Yet frankly with US bond prices falling this week due to a story of a better coming economy, or possible higher inflation down the road as a result is convoluted and far from guaranteed. Has the past trillion dollar stimulus moves helped unemployment?
Or ask why, at the exact same time this week, (which is supposedly inflation sensitive) did gold get hammered and also fall sharply? So essentially gold and US bonds were strongly at odds. Which one is telling the inflation or deflation truth?
In summary the daily financial media hype, although newsworthy and potentially interesting to some, is not indicative of the trend truth (except in rare cases we have described in the past).
The road to profit is always by determining the current trend.
This can only be properly accomplished by technical analysis - or as I call it; the new and emerging science of trends and cycles using advanced technical analysis.
Remember the old financial maxim that the trend if your friend. Spot the trend and go with it.
Cycle Alert
Having updated several cycles this week, I have slightly extended the previous discussed cycle hot-spot or time window for a possible change in trend (CIT). The current cycle hot spot for a CIT is amended to Monday December 13, 2010 until Wednesday December 15, 2010.
Chart Truth
Two technical charts exhibits below relating to the SP 500 Index and the NYSE new High Low Ratio are largely self-explanatory and reiterate caution.
Astro-Sky Exhibits Below
A few of our blog readers have sent me their personal responses to the Astro-Sky Challenge in our last blog. At present, no one is close to what I was hoping to demonstrate. As a result, I have posted the two Astro-sky dates as below using a geocentric layout, to ensure that everyone is using the same tools.
If you wish to comment, rather than writing me directly, why not help others by posting your answers in the comments area. There is no wrong answer as you are only sharing your observations.
James Kelly Sr.,
Editor in Chief, BBTL Blog
www.KRTT.com
www.Facebook.com/KRTTcom
www.twitter.com/KRTTcom
No comments:
Post a Comment