Where are we headed now that the first quarter is done?
You simply have to return to the post around January first to see the accuracy of my forecasts so far. The markets have not disappointed one bit. Oil has moved a bit further than I originally thought it would but other than that the forecasts have been spot on. As a note oil could move into the 80's but it won't stay there too long. It is about appeasing the oil elites and nothing more. You know keep the price at a certain level so that profits can be realized and governments can scalp the public. Gas prices here in the great white north are hovering around where they were when oil was at 128 to 147 a barrel before its collapse in 2008. Now either someone is benefiting nicely by these artificially high prices or there is a huge disconnect. Likely both. Here in Ontario we pay vastly more than the going rate in hydro and oil. We have people to look after you know and systems to maintain that cost a fortune. This is mind boggling to me but well, that is another story.
I think people are more concerned with their stock portfolio's and where the indexes might be headed. At the moment we seem to be in a third stage of a corrective cycle that might end seeing the SP 500 at around 2200 or lower. As I mentioned earlier not a crash but rather a sharp correction of extreme conditions. A reduction of leverage and a more balanced approach. The only question really is can the central banks keep prices from falling too far. The simple answer is yes. If they could reduce volatility to almost a none existent state then they can do this too. If you are on both sides of the trade you can control price direction. It is that simple. You see in days of old there was no controlling factor on the opposite side of the trade. The reason why the markets tanked was because everyone was on one side of the trade. For the large guys to get out the smaller fellows first had to take positions. Then once the small fellow took positions then they fund managers would pull their money out thinking the market was getting overheated and it would crash as there was only buyers but no sellers. That is how crashes occur in case you were wondering. That doesn't happen any more because either insiders dump more stock onto the market where the fed (or some central bank) buys the stock and prices rise or they simply reduce their positions where insiders buy back their stock and prices fall. Make sense? It should. That is how the markets rise and fall. This is why an imminent crash can no longer happen.
Commodities are not heading to the moon either for exactly the same reason. They are manipulated. Yes in all appearances they would be screaming buys for the average person because they are still low and a deal. However one would have to extrapolate that the CRB index along with all the commodities in them would rise like in a 2008 scenario. Not going to happen. You might get lucky with a pick or two but I would not count on it. That is why you did not see me jump on the band wagon. If I thought it was worth the risk (even though they are a value) I would tell you to buy them.
The markets are still headed lower and the dollar still headed to the areas that I thought it would which is around the 96.00 area. From there we will reassess. All you have to ask yourself is one question. "Are bonds tanking?"
I rest my case.
I think people are more concerned with their stock portfolio's and where the indexes might be headed. At the moment we seem to be in a third stage of a corrective cycle that might end seeing the SP 500 at around 2200 or lower. As I mentioned earlier not a crash but rather a sharp correction of extreme conditions. A reduction of leverage and a more balanced approach. The only question really is can the central banks keep prices from falling too far. The simple answer is yes. If they could reduce volatility to almost a none existent state then they can do this too. If you are on both sides of the trade you can control price direction. It is that simple. You see in days of old there was no controlling factor on the opposite side of the trade. The reason why the markets tanked was because everyone was on one side of the trade. For the large guys to get out the smaller fellows first had to take positions. Then once the small fellow took positions then they fund managers would pull their money out thinking the market was getting overheated and it would crash as there was only buyers but no sellers. That is how crashes occur in case you were wondering. That doesn't happen any more because either insiders dump more stock onto the market where the fed (or some central bank) buys the stock and prices rise or they simply reduce their positions where insiders buy back their stock and prices fall. Make sense? It should. That is how the markets rise and fall. This is why an imminent crash can no longer happen.
Commodities are not heading to the moon either for exactly the same reason. They are manipulated. Yes in all appearances they would be screaming buys for the average person because they are still low and a deal. However one would have to extrapolate that the CRB index along with all the commodities in them would rise like in a 2008 scenario. Not going to happen. You might get lucky with a pick or two but I would not count on it. That is why you did not see me jump on the band wagon. If I thought it was worth the risk (even though they are a value) I would tell you to buy them.
The markets are still headed lower and the dollar still headed to the areas that I thought it would which is around the 96.00 area. From there we will reassess. All you have to ask yourself is one question. "Are bonds tanking?"
I rest my case.
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