A promising picture

For those waiting for economic reality to re-couple with North American stock prices, this update of the Shanghai composite offers promise of lower prices ahead. The chinese market tends to lead North American stocks and commodities by 4 to 6 months. We have been watching this index closely for hints as to whether global stocks may re-test the 2009 lows this down cycle. Re-testing prior lows is actually a recurring feature during secular bear markets, but figuring out the ‘when’ is always tricky.  With the Shanghai still falling and now just 400 points or 20% above its liquidation low reached in November 2008, global markets clearly face further downside risks over the next couple of quarters.
Source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

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6 Responses to A promising picture

  1. michael says:

    The “insurance” investment has now just become another adventure in risk on…..anyway an Ominous indicator for gold bugs has just reversed course…..maybe he will be right this time…..we will see…..


  2. Robert C says:

    Every once and awhile we come across that deal that is too good to be true and we know there is some catch or downside risk to that deal. I look at the various charts and see it is clearly a risk off environment. I then look at my very very short term risk investments which I ventured into since mid November and give my head a shake. On average up 11%. I look at the charts again and review the world financial situation and once again shake my head. Facts are facts and when I see 11% growth it tells me things are looking up, buy more stocks. But this is an irrational fact. The only fact I see for this gain was I was lucky enough to pick the stocks that were being sold off by others to meet margin calls, selling off the losers and window dressing their portfolios. Yet the investment industry would hold this up and would say we have bottomed and have turned around. On what factual basis does this prove correct. I look at some of what is normally my core holdings which sold via a stop-sell and they are still below the selling price. Nothing has changed in Europe, the Italian bonds are up again, China stock market is dropping, the US debt continues to grow, when our North American correction comes it will not be pleasant that 11% will disappear just as quick as it appeared, Santa Claus will have returned to the North Pole. I will keep my sell stops on these stocks in place and raise them a little higher, but I do not see any verifiable facts other than the Santa Claus Rally to justify an 11% increase in such a shorttime. I will continue holding a 60% cash position, review your charts and blogs and a few other peoples factual information and when that downside occurs I will be ready.

  3. doug robertson says:

    This is what happens when the worlds largest paper printer mates up with the largest in-sourcer of jobs from the worlds largest paper printer. Addictions can cause cruel and unwise results.

    File under: Malinvestments

  4. JW says:

    All we can do is to play the market as it is without bias. Ow, and cross your fingers.

    BTW, Bradley’s next major turning point is ~ March 16. (last ~ DEC. 28/2011) according to Amanita site.

    My 2 cents. JW, Vancouver.

  5. doug robertson says:

    It won’t be the first time Gartman was wrong a day or after he
    witnessed a ghost calling GOLD BEARISH in his sleep, and it unfortunately won’t be his last. I wouldn’t pay Gartman much attention, fwiw.

    However, Danielle is correct. Just watch the charts!

    Trying to time the ‘gold market’ is a fools game. Like the Keystone Kops running around with a firemans net trying to catch someone trying to jump off the roof, but who keeps changing their mind and runs from side to side making the Keystoners try to keep up with whats on the jumpers mind.

    Just watch the chart, and WAIT for the trend to develop. I bought the yellow metal in late 2000 and painfully watched it (gasp, go LOWER) for much of 2001 until it finally was ready to go ‘up’. When gold ‘wants’ to go up, it will show up on the chart because the charts will recognize the trend.

    But personally, it will go higher. Its in the cards, not the charts.

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