Is the S & P 500 fall now on the cards, as warned in January and August?

I stated in January and again in August and September, what I felt would happen over this second and third quarter of 2010. The S & P 500 has made some efforts to break out, in this third quarter to the upside, after following the predictive pattern I set out in January 2010. I am still comfortable with the view that the market is due a negative move down, following the market's failure to continue its upward movement, resulting from governments' stimulus activities and bailouts in 2008-9. Now that these have been spent and new infusions will be added, only after the shocks have taken effect, which ly ahead. I wish to point at my previous assumptions which I have stated as part of my evaluation of this year's economic market movements.


I said on August 11th, in addition to my prediction as to the S & P 500's movement, that, if I had additional funds I would add the USD/CHF and USOil to my market trades. That statement was as follows: "If I had the funds, I would add two more trades, the USD/CHF and USoil. The first I would trade Short and the second I would also trade Short initially and then, after its support point and full turn has been reached, go Long."

I would be happy at this point to close the USD/CHF NOW, as I don't see the market falling much lower than this. The USD/CHF bottom is most likely here, at this point. I also stated too, go Short -and then Long, as oil turned, switching any time from the end of August to the first week in September would of bought real profits in both directions to this trade. I expect this to continue up to the resistance of around 88 dollars if it breaks through 83$, unless the S & P 500 turns, and a market shock takes place, which has a real possibility of occurring in this month of October. If this happens oil will follow in the short term. It would be reasonable to ask, why didn't I use my funds on the second two trades first? The answer would be, 'I could not be sure when the S & P might fall,' so I needed my limited funds to secure my entry.

I Have also said repeatedly since 2008, that Silver would be an excellent way, of both protecting wealth and making real wealth possible, over the next 5 years in particular. This view still stands. As I study the activities of Governments and the Finance Cartels and their actions over their economies, there is absolutely NO free market today. They, with the exception of only a small number of States appear to have, a bipolar disorder, in their relationship with one-another. Their interests appear to have very little to do with reality and long term philosophical perspectives and agreement with one-another. With the exception of world finance and government oligarch aspirations.

I do not wish to bore readers with my historical knowledge of governments and systems of capital, but, the following are points of historical fact. If this epoch is the final expression of the period of mature Capitalism in decay -and the system is committing suicide, as has happened at least 5 time in the last eight hundred years. Following the periods of Mercantile, Commercial, Finance and Monopoly and the so called Pluralist epochs -and, rebirth's of capitalism. The Geo-Political environment we now see growing, particularly in the last 10 years. Expose an example of the stages which follow the systemic convulsions, which exist, during the periods of decay of capital. Whether a new world empire and capital system is born of this period, only time will tell. What history has shown, is, that it requires periods of usurpation of regions and cultures.

Is a market correction or collapse on the cards?

There was a number of macro-economist who felt a correction in the international Markets was on the cards leading up to Christmas, particularly around October. I too felt there would be a correction and agreed with much of the logic I had read at that time. Whilst many more Banks and Finance Companies did collapse, their government's tax payers took the strain and the loses. Halting the systemic convulsions. It was also thought, that the end of year's economic figures of a number of States would also produce negative market responses.

In addition, the large market financial players like Goldman Sachs, J P Morgan, and Chase Morgan et.al but to mention a few, will require a new crisis (as with Goldman Sachs' Billion dollar bets on various industry sector's future crises ahead), to produce new crops for next year's picking; now that the harvesting has been completed for 2009 from March to December. As the realisation that 2010 will give poor value and gains, due to the lack of green shoots and the market peaking midway 2010. Following the market culling and with such disparity in the use of bailout resources. The polemic market sectors and government intervention make it difficult to judge beyond the short term market movements, with so much insider dealing and liquidity around for those in the right group.

Anyway, following the unprecedented market improvement since March of 2009, it's fair to say, that market confidence has returned and borders on complacency for many. The recovery since March has been as a result of the infusions thrown at the banks, who have fed the chosen few and used the free cash to stimulate their own interest in 2009, as well as starting from low bases in the markets, due to the crash 0f 2008. In addition, successful Eastern Markets and Commodities have strengthened the recovery of the Stock Markets. Some top banks particularly in the US have had their best year in three, as a result.

The overall system of Capital outside the banking fraternity have not recovered, particularly, the economies of the UK and US -and are unlikely too in the near future. If the condition of the T Bills and Gilts markets are a measurement of investor concerns for the future of these economies. There is very little interest coming from private national and foreign purchasers in the Bond Market.

The bad news is, that it looks as though its end is near.

After studying a number of market data going back to 1983, there are disturbing patterns in the data. There has never been a recovery so steep and over such a short period as we have at present. And, if my interpretation of the data is correct, two fault lines are on the horizon, one in mid March and again in late June. There is a possibility that the mid March drop of around 15 points could be stepped over, due to the mutated nature of the present government market interference.

This will only store the pressure until late June's pressure reaches its peak, all gains could be lost from 2009 and more. Again, if the governments interfere they will only bring about a stagnation of the markets, contrary to the last 12 month's movement, holding the system on the precipice. At that point, historically, when this point has been reach, the market has hovered for no more than 3 to 6 months, stagnating back and forth without any sustained held gains.

Equally concerning, is that if this data analysis is correct then there are those already aware of this possibility. We could see the UK and US using their Foreign Policies to divert and reconstruct development options under such circumstances. Fiat Currency can and is be printed with impunity during times of national conflict. And, with less negative effects to the economy than during peace time. It's only when that QE money reaches the streets, that major economic damage occurs.

How do I understand Stock Market terms

Lets look at the terms and the process of Stock Market behavior. This will support your understanding the the local and international Market System. I will list the terms and direct you to the most succinct description of the object.

Listed terms
Leverage.
Hedge Funds.
Derivatives.
Commercial Paper.
Government Bonds.
DAX
NASDAQ
FTSE ACT 250
FTSE ACT 100
DOW JONES

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Futures & Options

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