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Of late, I have again been hearing
talk that Wall Street is to blame for the woes of the economy. Let me get
this right. The center of the world's financial markets, the very core of the
free enterprise system, is the blame for the economic mess that we now face?
Really? When the economy is expanding and the markets are moving up into
unsustainable bubbles, it seems that everyone is happy with the free
enterprise system. As housing prices moved into their bubble tops in 2005, on
the back of irresponsible lending and borrowing practices, no one seemed to
complain then either. But, when these unsustainable bubbles that were created
by the desire to capitalize on the free enterprise system begin to contract,
many want to stand back and blame the very same system. It scares me to hear
such nonsense because it only serves to prove the ignorance of the masses,
our irresponsible society and the evolution of socialist thinking in which we
have evolved.
Reality is,
we have the greatest economic system ever. However, like any other great
creation, it is often the ignorance of man and his attempt to make things
better that ultimately are at the root of the demise. In this case, the root
of the problem is not Wall Street or the free enterprise system itself.
Rather, it is Washington and their arrogance to think they can manage, fix
and control the system. Think about this. We have a bunch of politicians,
many of whom have never even held a real job, that we are relying on to fix
everything from environmental concerns to healthcare, to the economic woes.
Is that not insane? Would we go to our auto mechanic to get a root canal?
What does a politician really know about the economy? About as much as your
auto mechanic does about root canals. All that the politicians know is to
print money and to bail out the world. It's nuts and
that is the problem. Just as I said back in 2000 and all through
out the rally into the 2007 top, all this is doing is making matters
worse. The economy operates on a cycle. The economy breathes. This means that
is must contract, in order for it to expand. These idiots are trying to keep
it from the natural contraction that must occur. In doing so, they continue
to only make matters worse and then when the contraction does finally come,
it is far more violent than if the market was allowed to naturally ebb and
flow. Think about it. Was the decline into the 2009 low not far worse than
the decline into the 2002 low and were the efforts to "manage" the
economy not far greater during the 2002 to 2007 period than it was prior to
2000? Of course.
According to the long-term Dow theory
phasing and historical values, the data continues to suggest that the 2009
low was not the bear market bottom. In fact, the data continues to suggest
that the rally out of the 2009 low is likely a rally that should ultimately
prove to separate Phase I from Phase II of a much longer-term secular bear
market. Within the context of this rally we have the politicians trying to
manipulate the markets so that they can take credit for saving the world and
the motive for them is re-election. Not doing the right thing. But, they are
playing with a financial bomb and it will blow up. When it does, the Phase II
decline should follow.
The beauty is that it does not matter
what is driving price or that these idiots are continuing to try to
manipulate the natural forces of the market. Reason being, price is price and
it does not matter what's driving it as it still appears as a price bar on
the chart regardless of the driving factors. It is the meaning of the
structure in which these price bars appear that is important. As a market
technician, all I have to do is wait for the
structural setup. Once that setup is in place, the bear market decline into
the Phase II low will resume with or without their manipulation. I know for a
fact that there is a particular DNA Marker that has appeared at EVERY major
market top since 1896. This DNA Marker has also appeared at the vast majority
of the 4-year cycle tops, even if that 4-year cycle top was not associated
with a more major top. This set up is structural and statistical based and for
that reason it is completely independent of the attempts to
"manage" the economy. After all, it all boils down to price on a
chart. Therefore, once this setup is confirmed, I will know, just as I did at
the 2000 and the 2007 tops, what is about to occur. Did the fine folks on
CNBS or in Washington warn you of those tops? No, because they did not see it
coming and even if they did they could not tell you. This time will be not different. The technical setup will mature and when
it does, the Phase II decline will be underway. It's not Wall Street's fault.
If anyone is to blame, it's the politicians and greed of the participants,
which is what creates the cyclical expansion and
contraction in the first place. Don't be fooled again. At present, we
continue to operating under a Dow theory bearish primary trend change and
that we have multiple Dow theory non-confirmations in place. We are now
simply waiting on the DNA Markers to fall into place. The emotionless,
technical and statistical based research is available at Cycles News and
Views, www.cyclesman.net
Tim Wood
Editor, Cyclesman.com
Copyright © 2004-2008 by Tim W. Wood. All rights reserved.
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