Friday, November 15, 2013

FREECharts.com A Major Economic Indicator Is Ignored; What Caused Today's Rally?

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One Of The Most Powerful Economic Indicators Near

A Three Year Low Does Not Inspire Me

 

November 15, 2013
In This Issue
Details of Next Market Collapse
December E Mini vs December Bonds
December Euro
December Corn & It's Impact On The Meats
A Very Major Economic Indicator We Should All Watch

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Dear Friend,

 

This newsletter is not just a platform by which we get to take verbal shots at an idiot who managed to prove the Peter Principle on steroids. 

 

The idea is to point out how the incredibly stupid decisions, lies, and actions taken by the entire leadership, regardless of whether an R or a D comes after their name, have the potential to impact your portfolio and how we might protect ourselves from their lunacy.

 

I watched an interview with the gentleman who was one of the main authors of obamacare. A fellow by the name of Emanuel. He made it clear he suggested a leader with business, insurance, and technology experience should be heading up the healthcare train wreck. He claims he made this recommendation ever since he became involved in the project over 3 years ago and a person without these characteristics and qualities would be in charge of a blunder.

 

In as much as we have a person at the helm who possesses none of these qualities, how can we expect him to know to take such actions? In fairness to barry, we can't. There is no way he could know what type of person was needed and really no one in his cabinet would likely know either. For the most part, they have zero business experience.

 

In fact, most of the people who are involved with the Fed and the Treasury have had just about zero real world banking experience. 

 

This is why I continually beat the drum of self sufficiency rather than being dependent on a government that has no real world experience in virtually anything productive.

 

We must watch out for ourselves and each other. I do so at no charge to you through this newsletter. Reading tons of articles, connecting the dots, and coming up with what I believe are potential scenarios or possible ways to not become a victim of the less informed and the under achievers who have foisted yet another liar and spineless self serving hoop shooting constitution ignoring Tiger Woods Lebron wannabe. 

 

If and when the time comes, and the dollar gets rattled, we all better be ready to move forward with what we have and count absolutely zero on the government or their crony banking buddies to look out for us or our assets. They will more than likely be heading to their own bunkers with the assets of whatever institution they formerly ran now that your deposits actually belong to the banks.

 

You and I must begin to put together a plan to diversify and protect our assets. To have an escape plan a day or two ahead of the golden horde. 

 

Here is an old saying from Don Carter's mother who started out dirt poor in Dallas, TX to becoming a billionaire. If it is meant to be, it is up to me.


 

 

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December E Mini 

 

Many of my regular readers watched the videos I linked to on Wednesday. I hope you understood the ramifications of the IMF's plans regarding bail-ins for Europe and America. Taxing everyone's after tax assets at a rate of 34% for Europeans and 28% for Americans is going to start domestic uprisings. What we have seen in the past in Greece and Cyprus will be nothing.

 

Those people, for the most part, brought on much of this themselves by demanding such crazy benefits. They also could not get too wacky or everyone washes their hands of them. 

 

If and when it comes to America, there will be no one willing or able to see us through those dark days.

 

Lest we think only a few fringe radicals think Bernanke and the president are destroying our currency, it was reported today in a Zerohedge.com article, a law was introduced to the Russian parliament to make it illegal to own even one US dollar. 

 

You may remember I reported just a few weeks ago the Russians seized all retirement accounts. 

 

The Russians and their new friends, the Chinese, hold a tremendous amount of our debt. If they start selling this debt off to be the first to hit the exits, interest rates could jump dramatically, the dollar weaken almost over night, and inflation show up very quickly.

 

The Russians do not like how the Americans continue to debase the dollar and they and the Chinese are able to chart the QE vs Equities just like we are.

 

 

 As you can see by the Zerohedge.com chart above, the market does not do well when the QE is not pumping money into the market via the PPT.

 

When and if the stock market started taking a hit due to no more QE and the bonds started going down with interest going up due to the yield increase from falling bond prices, what do you think is going to happen? Do you think these folks have the expertise to pull back on the stick and save the economy from that nose dive or will barry, bernanke, lew, and soon yellen take us on the Ron Brown express? 

 

If this is the best they can do with healthcare, and that is reportedly 1/6th of the economy, what happens when they are dealing with the entire economy that seems to be on spin cycle?

 

Let's look at the e mini, knowing this is ultimately just a stimulated market that is not trading on it's own merits but on faux news and faux numbers. 

 

All we have to do is look at the employment numbers with an up day today which reportedly is due to favorable yellen outlooks. That should tell us the market knows what will happen with more Fed juice from yellen. 

 

 In this market, who really cares what the indicators say. If the fed and the president want this market to go up, it will go up. This market has increased by nearly 100% since the installing of obama. Of course, as you can see by the chart above, it is a market bought and paid for by the public for the satisfaction of this guy's ego. His ego is proving to be outrageously expensive.

 

ADX seems to be slowing but the RSI is indicating the bulls are getting more active with stochastics looking more positive to the upside. With no taper in sight, this market could have considerable upside potential still.

 

 The bonds had an inside day today and with the stock market going up, it looks to me like the bonds could be seeing a downturn early this next week. 

 

The ADX tells me the upward trend is all but evaporated while the RSI is turning south. Stochastics seems like it may be slower to respond as it looks lagging but beginning to bend from it's rise.

 

A break below 132 00 and we could see a move down to what looks like major support at 130 00. That is a big number with great significance.


December Euro

 

I just reported Wednesday the IMF's plan to bail-in Europe through a one time confiscation of 34% of what Europeans own. I pondered the question, will it come to America and if so, what will be the reaction here?

 

The Euro seems to be holding it's own for a currency serving a continent that seems to be going through a nasty currency and debt crisis.

 

 Although the daily ranges seem to be getting slightly narrower day by day, the RSI indicates we may be seeing more bulls jumping in. Stochastics also indicates there may be some upside but neither indicator gives me much reason to hoot or holler.

 

The ADX is also down slightly indicating to me the trend to the upside may be weakening with the recent upside the dollar has enjoyed.

 

I still feel this is a race to the bottom. The Europeans have a significant head start with decades of irresponsible socialistic policy but as usual, the American competitive spirit has shown up. Not to be outdone, we have brought forth our secret weapons. Bernanke and Obama. These two have leveled the playing field so we can not confidently race to destruction with the best of them, even if they have had more than four decades of a head start. Our boys caught up in just 5 years. 

 

Seriously, the Euro seems to be holding it's own. If and when the Europeans attempt to confiscate an enormous amount of their citizens wealth, we may be a gigantic beneficiary leaving a shell of old Europe to their new immigrants who had really nothing to do with creating the greatness of Europe anyways. Rather, America, Australia, New Zealand, and some Central American countries may very well be on the verge of receiving tremendous wealth and a wonderful brain trust.

December Corn

 

Although corn did go up a bit today, I am still of the opinion supply and demand impact this market. With a record crop nearly 100% harvested, I can't help but believe from a fundamental outlook, this market should be going down.

 

Demand should be dropping with some of the big consumers like hogs while demand may be increasing with beef. It seems with lower prices producers may be holding their cattle back and fattening them up for a few more months.

 

 Actually, when you look at the chart, you will see the high today was actually lower than yesterday's high and the close was near the low of the day.

 

To me, both of these are negatives. The ADX is certainly pointing to a weaker trend while the RSI is off sharply and the stochastics is certainly pointing down.

 

I guess I will stick with my 391 pick from earlier in the week.

A Very Major Economic Indicator

For you regular readers, you already know my opinion of copper. Until copper is bought, not much else happens. I have warned many times in previous newsletters to not believe what the silver tongued devil tells us if copper is not leading the way. It isn't.


This market is very low and looks to me like it wants to go even further. The trend is down and the ADX is indicating that downward trend may be strengthening. That does not mean the market will be going up. It means the velocity of the drop may be increasing.

Although the RSI is turned up slightly indicating some bulls may be entering this market, stochastics remains somewhat negative.

This was a daily chart which would indicate copper is low since August. With that in mind, so we can get a better prespective, I have also included a weekly chart.


This weekly chart goes all the way back to early 2011 so it covers nearly 3 years. Other than a brief time mid 2013 and October of 2011, this is the low. 

I don't believe there is any recovery until copper is moving up. Think about it. Before there is any meaningful recovery, we have to have blue collar manufacturing jobs created to make lightbulbs, appliances, electronics, wiring and switches. 

So without copper being bought first, to make these building supplies and manufacturing components, I don't believe we are having a sustainable recovery. The numbers might be massaged some here and there, but ultimately, without long-term meaningful employment for our fellow citizens, we are going to stay floating in the sea of mediocrity. 

You can see clearly in the chart of the QE injections, that is all that is pushing this economy to be a well dressed and perfectly groomed pig with the reddest of lipstick. Take away the pearls and the lipstick and you still have a pig. 

If there is a stock or commodity you have a question about, let me know. I will try to get back to you as quickly as possible and perhaps include your question in the next newsletter.

Hope you had a nice Veterans Day where we have the honor to give honor to the military that has allowed us to have the country unlike any other country in the world or throughout history. 

They have beaten back every threat thus far and pray they will continue to do so, whether that enemy is found to be foreign or domestic.  

Email me RBiggs@FREECharts.com with any questions or suggestions you have and I will get back to you as soon as possible.  
Sincerely,

 

Robert Biggs
Robert Biggs
FREECharts.com
Disclaimer: There is substantial risk in trading futures and options on futures. Past performance is not necessarily indicative of future results. You may make money or you may lose money regardless of whether you or an industry professional manages your account.
  

 

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