NOT SOLD YET
One of the many great story lines out there that is constantly kicked back to us is the notion that China is the world's savior. We are going to get rid of the dollar and the Yuan will be the standard. They are buying all these commodities because of their booming economy, blah blah blah... The above is the weekly chart of their stock index. Does this look like boom time to you? This to me looks like something in quite a bit of trouble, hardly something I would want to bank my future investment bias on. This country has runaway inflation, and real estate and construction comprising almost 70% of their economy. In my opinion it is the greatest house of cards ever built. Even in our heyday of bubbles, we never approached those levels of disproportionate weightings in our economy.
If you are basing your investment plan on buying commodities because of all this "international" demand, you might want to rethink that thesis. Here is by comparison thow the Bernanke 500 previously known as the SP 500 looks on a weekly basis. This helps to reinforce what I have said all along, as we go so goes the world. Do not get caught up in all this nonsense about how we can fall out of bed, and everything else will boom. If we go down, we will take everyone with us. This is why The FED is doing what they are. They know full well the whole ball of wax is on us.
Just look at how much stronger our market has been than that of China. The older I get the more angry I get at all the BS that is out there in the media. It is so hard to find someone who will tell you the truth. It seems everyone has an agenda, and the opinions they have are all crafted to help to mold behavior in the masses that perpetuates their own interests. These people throwing out all this crap are not idiots, just listen to how they speak. Do they sound like they are not intelligent?
The point of all this is that you have to tune out the noise and do your own research, make your own decisions. I am not sold on this idea for the above reasons, I am also not sold on the big stock sell off yet based on yesterday.
Thinks look very weak at the moment, and I am expecting a significant top right about now. However, when I ran about 100 of these pattern forecasts on stocks last night, most of them looked like this or a bit more bullish for the next week. This makes me wonder if this is a good spot to get heavily short or not. I have decided that it is not and am waiting now for a bounce to do so. These forecasts are nothing to wager your house on, they are hit and miss at times. However, when I see them consistently telling me up across this many stocks, it makes me think the situation is more bullish than bearish. I guess we will see in a few days, since I am talking in the near term here.
One trade I do have orders in for a long position today is Cocoa, that market is down a good bit so it seems unlikely those orders will get filled.
Keep your powder dry, our big short is lurking just not quite yet.