Juggling Dynamite

Robert Prechter of Elliott Wave International sat down on November 11 with Kevin Depew of Minyanville. I am not an Elliott Waver but I respect Prechter's discipline, longevity and careful study of human behaviour and market cycles. He thinks that the market is topping out now in the bear market rally since March. He may be right. We have thought that prices have been topping out since June and so far the bulls have kept running. They could push prices further yet.
But in the end, getting the big picture primary cycle correct is “the'' most important aspect of lasting gains and avoiding market down drafts. Those looking for perfect timing have to avoid the stock market altogether; those looking to survive and thrive through all the stages of each market cycle must adopt a pragmatic, humble approach. Its not what markets make, but rather what we keep that matters most.
Watch the almost 20 minute video here. Hat tip The Big Picture blog

Sunday evening from 8:13- 9pm EST I was a guest on No Quarter Radio’s Sense on Cents with Larry Doyle. The 45 minute interview is available on line here, starting at 13:00.

So far US dollar down, markets up again today: if only we were witnessing a true demand driven recovery story, market action would be so much more encouraging!
A few stories and clips of note today, see:
*Which big country will default first? -by Martin Hutchison:
“Of the world’s six largest economies, three currently have budget and public debt positions that if allowed to fester will push those nations into bankruptcy…so which major country, the United States, Japan or Britain will default first on its foreign debt?”
“China has huge amounts of hidden debt in its banking system, which could well collapse, but its direct public debt is small, as is its budget deficit, so it is unlikely to enter formal default.”
“We have not experienced a debt default by a major economy since the 1930’s. That three such defaults are currently conceivable indicates both the severity of the current downturn and the wrong-headedness of the policies taken to address it.”
*Oil market continues to be soft – Rex Tillerson, chairman and CEO of ExxonMobil:
“We are well supplied in the oil market, with inventories at record levels globally”,
“Inventory levels are at historic highs levels — especially in the U.S.,” Tillerson said. But “a foreign exchange effect” is keeping prices higher, despite the amount of oil available.
“If you put the price of oil, which is priced in dollars around the world, and if you look at what some of the currency effects are with the weak dollar — in our view that is contributing about $20-25 a barrel to the price,” he said.

*Art Cashin: “The dollar remains a heavy influence:”

*Bloomberg: Europe’s economy emerges from recession on exports:
“Europe’s economy is gathering strength after governments stepped up stimulus measures and the European Central Bank injected billions of euros into markets to encourage lending. While confidence in the economic outlook is at a 13-month high, rising unemployment, the expiration of stimulus plans and a surging euro are threatening to undermine a recovery.
“The euro-zone economy has officially turned the corner and that is cause for relief, but not celebration,” said Martin van Vliet, a senior economist at ING Bank in Amsterdam. “The economy remains in a fragile state and is recovering mainly because of government stimulus and temporary inventory effects.”
*Bloomberg: Consumer sentiment falls as unemployment mounts:
“Confidence among U.S. consumers unexpectedly dropped in November as the loss of jobs threatened to undermine the biggest part of the economy.”
*Bloomberg: Home-purchase Index in US plunges to lowest level since 2000
“Mortgage applications to purchase homes in the U.S. plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit. The Mortgage Bankers Association’s index of applications to buy a house dropped 12 percent in the week ended Nov. 6 to 220.9, the lowest level since Dec. 2000.”