HOW HIGH CAN WE GO?
I have one possible target on the screen at 1571, will we get there? I have no idea. We are in a very strong bull market now so who is to say how far we will go, and whether or not we will have a decline next month. It certainly does not appear to me a decline is coming, and picking tops is something that is a fruitless exercise. There is certainly no doubt in my mind if a dip comes it is a buy. Once again we see that the disconnect between the economy and the stock market is alive and well. I have maintained and continue to maintain, that we are going to have a long flat period in the economy and not Armageddon, a Japan type of situation.
If that assessment is correct, and we have low rates for a very long time, I don't see why we can't have a strong stock market. One of the things I researched and reported on in here a couple of years ago, when it was apparent the new regime wanted to change our system to one of socialism, was what effect that would have on stock prices. Now that it is patently clear that hypothesis was correct, we have to look at what that study showed. It showed clearly it was not a negative for stock prices. What it did show that was curious was that stock prices in countries converted to socialism tended to follow the world leading country. The dilemma now will become who that will be if Barry gets four more? It is clear he does not want it to be the US, since he wants to diminish our dominance. Further, it is hard to believe it could be China, a communist country. Further than that, there does not seem to be an obvious choice.
Just by definition, a socialist country cannot be a leader, so if the world becomes flat economically, it will be very interesting to see who emerges as the new leader. I have no idea in all honesty. Net net, for those looking for a big decline because of the conversion of the US, it is not likely to happen. It just boggles my mind when I listen to this guy talk, and that complete idiot VP on top of it, that there are 100 Million people dumb enough to vote for this guy. It is shocking 1 Million people would vote for him. He has done a fabulous job of creating internal turmoil and pitting us against each other, to the point where the class warfare is actually working. Even in spite of what happened to me with PFG, I do not want a hand out from someone else. I will build my money back up, and if that blank... comes in and tells me I did not do that somebody else did, LOOKOUT BELOW!
As I watch the circle of the Fed and the Banks get tighter and tighter, what I have missed in all of this analysis has become clear. They are controlling us through the banking process. They keep giving banks beneficial legal decisions that have no legal precedent. The Fed is controlling the stock market almost completely. The money is getting concentrated in a place where they can control it and control us. I don't know why I did not see this before. I do not know how to break this circle other than to leave the US, and I don't think that is the solution. Keep in mind if we were to get an inflation spiral, which does all of the sudden now appear to be a possibility, that gives them more control. There will be more people relying on the government than ever. Check mate.
This is all conjecture on my part, but it would be tough for someone to change my mind. I never really thought the idea of the tri-lateral commission was even worth studying, because I just never thought the collective public could be manipulated to the degree that it is being done now. Perhaps that is an area for further study.
To pull of this grand scheme if in fact there is one, Bond prices need to remain strong. You can see in the next chart, there is a text book BUY setup with the COT data at hand.
We have an up trend in price and a decline against that trend with Commercial buying accompanying it. We have a huge decline in Open Interest. There is very negative Sentiment now. The Proxy Index has also shown huge buying. From a COT perspective, this is about as good as it gets. This does not mean you run out and buy Bonds. It means that fundamentally we are setup for a rally now. It is up to shorter term tools to ferret out trades.