COMMENT: Hi Marty,
I must say your analysis of the dow for the last six months is simply mind blowing.
Everything you said has been accurate. You are right that most will not get what your saying because they are stuck in a linear world – not a dynamic world.
You did say markets would churn into May. You were SPOT on. I guess what throws most is when you say we could get a high in May/June or September. They can’t process the dynamism. They guys would be good candidates for government work where they can just try control everything.
Indeed I am looking forward to the biggest “mind twisting” trade of the century, as you say. It is looking at this stage like a May/June high – everything is truly connected. You have opened my eyes forever.
REPLY: It is so hard for many to understand how everything is connected and to separate me from the computer. The vast majority who disagree always make this personal rather than the analysis. The churning of the Dow until May was connected to the dollar rise and the collapse of the Euro on just one level. If you would normally see a decline that everyone was calling for in the US market, they missed the currency play which would provide steady support for the Dow.
This is the same connection why I warned the White House in 1985 that forming the G5 to lower the valid of the dollar by 40% would set off a crash in 2 years. That came precisely to the day of October 19th on the Economic Confidence Model 2.15 years from the bottom of the 51.6 year wave 1985.65.
Government is clueless when it comes to currency and this is reflected in mainstream analysis, which just ignores capital flows. Since the Japanese had bought nearly 40% of the US debt and were buying property and stocks in the USA, G5 was telling them they were going to devalue those assets by 40%. A moron would sell if the government told him he would lose 40%.
I was called in by the Brady Commission for we ended up with 4 clients on the Commission investigating team who insisted we be called in. My biggest accomplishment was to stop punitive sanctions against the market and the Brady Commission reported just politely saying they thought foreign exchange had something to do with the Crash.
The Euro is in trouble for the same reason. They did not understand currency – nobody in government seems to understand this subject matter or for the most part in mainstream media. The EU Commission failed to consolidate the debts even after attending our 1997 London World Economic Conference taking the whole back row. Southern Europe converted their debts to Euro and the currency rose from 80 cents to $1.60. They then owed TWICE as much as what they did before the Euro and then Brussels yells at Greece when they are the victim here and did nothing but get screwed out of this deal.
So the Dow has traded sideways and that was ONLY possible if the dollar rose and the Euro crashed. So it is NOT my personal opinion, this is simply how the world functions for EVERYTHING is truly connected. We forecast the high in gold for 2011 and in 2011 we warned the Dow would run off to New Highs which was even reported by Barron’s. One forecast is connected to the other. This is not a matter of luck. This is a matter of global correlation and opening your eyes.
Full article: It’s All Connected – Just Open Your Eyes (Armstrong Economics)