CHINA THE SAVIOR
As my cousin Vinny said, let me ax you dis, does this really look like the stock market of the new world leader, the one who is going to take over the US? The one with GDP expanding supposedly at 8 - 10%? Perhaps the stock traders know of all the fraud that is present and how potentially bogus this whole charade over there is?
I can assure you if the US were experiencing 8 - 10% GDP growth our stock market would sure not look like this one does. Here in the US it is big news when there is an accounting scandal at a billion dollar corporation, in China it is so accepted that it is a yawn when they take place. I found this story below at Yahoo Finance the other day about Caterpillar and it is just another one of a ton of stories just like it.
So many pundits claim that China is the new world leader and also is the reason Gold will soar because of their demand for it. However, this is a place that could poof like the road runner in the cartoons tomorrow. It is my recommendation that before anyone gets too carried away with the bullish China stories that you study what is going on over there. If after doing so you still buy the hype then buyer beware. I have drawn out what would happen if we were to play out the last scenario at the prior seasonal peak the same way. We have followed the seasonal pattern incredibly closely recently. Readers know my feeling on this, stay with it until it comes off the rails.
WHAT IF THEY ARE WRONG?
As the world writes off the Bond Market as being finished, look at what is going on there currently. There is a huge divergence in the POIV accumulation distribution indicator. Look at how much higher the purple line is than where the price is. This is also coming at a time when price is in a crucial support area. This is similar to what I stated about Gold back in July and August of last year when it approached critical support. It needed to hold or look out below, it held. We did not have this level of divergence at that time but the price situation is somewhat similar. What if they are wrong?