Bulls and Bears: Beware of this Market Rally

Markets oscillate, they don’t go in a straight line. Novice investors often don’t realize that. When I speak at a conference, and for example I am bullish on the stock market, an investor will come up and say, “But you’re wrong because the stock market was down the past two days.”

Such an investor should buy US Treasuries and go golfing.

Oscillations and waves occur everywhere in the universe. Did you hear about the recent discovery of “gravity waves” the existence of which was predicted by Einstein? Finally they have instrument to prove their existence.

Is Gold Making A Triumphant Comeback?

Analyzing the long term economic and market cycles, the probability is very high that the stock market downturn may eventually be the worst since the Great Depression. Of course, there are many more safety nets now, and the central banks of the world will coordinate in order to soften a decline. But the Fed and other central bankers are not the solution. They are the problem.

All the ‘safety nets’ have to be paid for with money the governments don’t have. Therefore, it will have to be financed with ‘money creation’ by their central banks.

Is It Too Late For Investors To Panic?

In the first phase of a devastating bear market, such as early 2008, analysts always say, “Don’t panic. No one ever made money panicking.”

Our reply is that panicking is very productive at times. Panic is a protective response built into all life forms. It triggers the flow of adrenalin, which initiates a “fight or flight” response giving you either more speed when running away, or more energy to fight and make decisions.

Why The Next Two Years Could Be Worse Than 2008

On December 16, the Fed hiked interest rates by 0.25% as widely expected. The majority of analysts had predicted that because almost every Fed official coming into the media had made the case for a hike for several months.

In other words, the members of the FOMC had made up their minds, no matter what the facts were.

I wrote in our award-winning Wellington Letter that a hike would lead to a severe reduction of liquidity, and thus a strong market plunge in 2016.

Six Reasons Why The Fed Can’t Raise Rates

I have written for about a year that the Fed will not be in a position to hike interest rates in 2015 because of economic conditions. By no stretch of the imagination can someone, who looks beneath the surface of the phony economic numbers issued by Washington, conclude that the economy is strong.

Wall Street analysts always cite the employment numbers as a sign of strength. They don’t look how these numbers are manipulated and just believe what comes out of the Washington “spin” machine.

The Coming Economic Shock

For the last 3.5 years, the Swiss National Bank (SNB) has held the value of the Swiss franc (SF) at constant value with the euro. It does this by buying euros for Swiss francs when the value of the euro threatens to drop because of heavy selling.

As we reported in our Special Bulletin of Jan. 15, all those promises and assurances went out the window as the peg with the euro was abandoned. This caused shockwaves throughout the global markets.

China Shock!

Posted on The Street.com

(Editor’s note: This article was submitted on January 22 before the China economic data were released.)

NEW YORK (TheStreet) — International Business Machines (IBM) came out with a shockingly disappointing earnings report, with sales in China down a whopping 23%. It blames the lack of orders from the large SOEs (state owned enterprises). According to the Wall Street Journal, that consists of a 17% drop in sales of its hardware group last quarter, and “a stunning 40% drop in Chinese hardware sales.”