After a corrective a-b-c pattern (Elliott) to last Friday’s low, the NASDAQ made new highs yesterday, leaving little doubt that the Dow would likely follow suit, as it has tended to do when such instances have occurred in the past. It does not take a seer to forecast that this should occur this week, following-up on today’s catch-up outperformance of the NASDAQ by the Dow.
Almost as predictably, one may have guessed last week that this new high could occur. Here is why:
In 2000 (Sid Klein Daily Fax excerpts at New York Major Turning Points), the game was to blame the decline in January of that year on Y2K. This allowed investors to conclude that the pursuant new all-time-high was proof of the market being problem-free, since Y2K was now acknowledged as being a non-issue.
Similarly, the events of September 11, 2001 were understandably blamed for the sharp decline. Regarding the theme of this market phenomenon in the specific context of 2001, please note the first ever online report, entitled “TIMELY.”
By using only a few of countless examples, the linked reports above provide market participants with the opportunity to do a timely mini-study of the phenomena that has market declines blamed on extraneous events; investors then feel safe to get back into the waters when the market surpasses the level from which the market initially fell.
(Given that the equity markets may presently be at a 2000 or 2007-style summit, I advise taking the time to perform the mini-study.)
This time, the prevailing story following last month’s peak was the Coronavirus.
As opposed to being deceived, if an investor understands the phenomena, one will not be fooled and will instead join the front-running big boys in exiting the market ahead of Dow 30,000, by benefitting from the buying demand created by the short coverers’ attempt to achieve the “headline-grabbing round number.”
NOTE: The phenomenon that is the subject of the above-recommended study is caused by the ever-deceptive Wall Street manipulators, hereinafter known as, “The Short-Coverers.”
From the December 2, 2019 report:
“WARNING: At major cycle peaks, I have cautioned that blow-offs occur to nice round headline-grabbing numbers. In this case, 30,000 is such a number, just as 40,000 was the Nikkei’s number to watch 30 years ago. Included in the warning, note that a fancy number serves a “magnet” that is front-run by smart money.”
As regards the believability of this week’s new highs, please note that silver and gold have remained strong, despite the deepening confirmation of the asymmetric trending that has been unfolding between the precious metals and global equities.
Notwithstanding this article’s forecast and analysis, please note the strategies found in the recent articles’ STRATEGY sections.