Bonds are tanking, which means the Master Planners must buy Bonds, and soon. That is going to divert their attention away from supporting equities, as Housing is going down the drain if the long end sees higher interest rates. This Bond bailout is going to require hundreds of billions, maybe trillions of Dollars. The Dollar must dive, given all the monetary inflation, which means holding U.S. securities will not be desirable to foreign investors. Precious metals and Oil will skyrocket. Equities should suffer from all this in the short-run, and soon. What a mess, all because of bubble inflation by the Fed, an unwillingness to allow for a mild normal correction in equities over the past four years. The cause of this mess is hyperinflation, and the Master Planners ' solution to this mess is more hyperinflation.
M-3 may be hidden, but the Dollar, Gold, Silver and Oil can smell the burning printing presses. Did you see what they did today? Dollar fell into the 78's. Gold busted above its May 2006 high of $730. Silver was up 0.36, and Oil closed at 83.32. Eighty-three, thirty-two! The Fed may be fooling CNBC, but that's about it. Okay, maybe most folks in Congress too, Ron Paul excepted.
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The Dow Industrials fell 48.86 points Thursday, closing at 13,766.70, and there is evidence developing that we are approaching a top. The retrace of the decline from July 17th through August 16th has been 86 percent. That is high for a wave 2, but not so high for a "b" wave. In fact, a "b" w ave could actually exceed the 14,021.94 top, and still be followed be a decline into wave c down of Intermediate wave 2 down. NYSE volume fell to 97 percent of its 10 day average, with downside volume leading at 70 percent, declining issues at 70 percent, and downside points at 85 percent.
The last time we approached these levels, near 14,000, the market immediately plunged 10 percent. It is hard to see what has improved so much since July, that would allow prices to rally decisively above 14,000 at this time. Faith in the Fed is up, but is that enough? With a "b" wave likely in process, we may be witnessing an old fashioned Double Top pattern. The coming October 5th +/- phi mate turn date and accompanying Fibonacci Cluster turn window has the markings of a significant turn, and since we are only about a week away from the start of the turn window, it is looking like another significant top is in the works.
Here's one piece of evidence that a top of some significance is fast approaching: The Weekly Dow Industrials just kissed their top Bollinger Band this week, two standard deviations from their 20 week moving average. We usually see multi-week declines start within a week or so after this occurs.
Get ready for the largest period of inflation this nation has ever seen. For those of you on fixed incomes, or living off of hard earned cash you saved your whole life, this macroeconomic policy of the Master Planners, Artificial Economics, not taught in your children's or grandkid's college textbooks, will be especially harsh on you.
Another piece of evidence that a significant top is approaching comes from our PPT Indicator Thursday. One of our best indicators has been the Plunge Protection Team Risk Indicator, the PPT Indicator. It sat at extraordinary negative levels for a few weeks, which looked like an aberrant "buy" signal, but turned out to be accurate. Whenever this reading rises above positive +20.00, or falls to below negative -16.00, we usually see multi-week rallies. Declines can occur when this reading falls within the range of negative -16.00 to positive + 20.00. Tonight, this indicator has risen to negative -10.76, solidly inside the range where declines can occur.
And of course another sign of an approaching top is an approaching phi mate turn date. And Fibonacci turn date window, with prices rallying into it.
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