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Michael Clark
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Michael J. Clark was born and raised in Sinclair, Wyoming. He is a poet, novelist, artist, historian, and market analyst. His fine arts portfolio can be found at the following address: http://www.hoalantrangallery.com/MJC2.htm His writing portfolio can be found at:... More
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Clark's Gate Timing System ©
    Nov 18, 2012 9:09 AM


    Over the weekend I read a post by Brett Jensen in which Brett asks "Did Apple Bottom on Friday?" This made me wonder what indicators Brett was using to gauge a bottom. (One of Brett's readers chided me: "Many it's time for you to start using valuation indicators" -- instead of my traditional technical indicators.)

    Brett began his article with an infamous anonymous barb: "It's the man who waits for his ship to come in who's always missing the boat."


    I had begun the weekend by lookiing at my short position charts: all seemed very solid except perhaps UGA, which is trying to bottom. I am considering selling my January puts of UGA. The only thing keeping me from doing so is the strength of the US Dollar.

    When I loaded a chart of Apple Computer, I saw nothing suggesting a bottom. In fact, Apple looks pretty nasty still. I must admit that none of us really know what is coming. We develop instruments to try to help us -- but PRICE MOVEMENT is the only true indicator. This is a psychological indicator that cannot really be measured by scientific instruments. Fear and greed are not really measured by valuation indicators.

    My best indicators for 'foretelling directional change' are the two colored momentum indicators in the top pane (Red: CGTS; BLue: M5). Next are the two trend indicators (green line, top pane;red line, second pane down). All of these are still negative.

    The two bottom panes show very short-term movements in price. One would expect to see some movement up if there really was a price movement of substance occuring. Nothing indicates growing buyer commitment here.

    The CGTS PB Trend for the Week (Green Line, second pane down) will move above zero when the correction is over. It is still below zero, and flat in the negative zone.

    (click to enlarge)

    I am including a more detailed view of the same chart, with a close up view of the two top panes. This shows a VERY NEGATIVE picture. This does not mean this picture cannot change rapidly. It can. That comes about in the psychology of the market, usually indicating when PANIC BUYING replaces PANIC SELLING (Greed trumps Fear) -- and this can and does happen fast.

    (click to enlarge)

    The media has been pumping the markets to stop the correction: 1) Fed considering more QE measures; 2) Fiscal Cliff may be resolved: "Negotiations Constructive," Republicans say... It is private debt that is killing us, not, simply, the government deficit.

    I decided to run a report using my short term BUYING AND SELLING Strength Indicator which shows up in the chart below (third pane down, brown) of SPY, S&P 500 ETF. The chart shows this indicator is predominantly Zero to Plus One in a bull move, Zero to Negative One in a bear move.

    Our M4 21 indicator (black line, second pane down) is our primary momentum indicator -- but we supplement with the shorter indicators to try to get a sense of market dynamics within a primary move in either direction.

    (click to enlarge)

    Our report shows 16 issues giving bullish "+1" readings -- but only three of the 16 issues were NOT inverse ETF issues that gain when stocks retreat: EDU, Netflix and Yahoo.

    101 issues are giving bearish "-1" readings -- many (indexes) with very recognizable names: the Dow Jones Industrial Average; the German DAX Index; the Australian All-Ordinaries Index, the S&P 500 Index; Pharmaceutical Index (DRG); Gold Stock Index (HUI); KOSPI South Korean Index; Shanghai Composite Index (China); Computer Index (XCI); Oil and Gas Stock Index (XOI).

    See below for complete list:

        Scatter SUM Day Before Description
    BZQ 78.28 1 1 Short Brazil Shares ETF
    DOG 36.07 1 1 Short Dow 30 ETF
    DXD 52.54 1 1 Short Dow Industrial ETF
    EDU 19.01 1 1 New Oriental Educations and Technology
    EPV 32.77 1 1 Short MSCI Europe ETF
    FXP 23.03 1 1 Short FTSEChina Index ETF Daily
    NFLX 80.9 1 1 Netflix
    PSQ 26.99 1 0 Short QQQ Index ETF
    QID 33.084 1 0 Short NASDAQ Index ETF
    REW 41.68 1 1 Short Technology ETW Daily
    SDOW 78.96 1 1 Short Dow ETF
    SH 35.9 1 1 Short SP 500 ETF
    SMN 64.88 1 1 Short Basic Materials
    SPXU 44.65 1 1 Short S&P 500 Index
    SSG 48.72 1 1 Short Semiconductors ETF Daily
    YHOO 17.86 1 0 Yahoo Inc.
        Scatter SUM Day Before Description
    ^AORD 4,360.10 -1 -1 All Ordinaries Australian Index
    ^DRG 354.59 -1 -1 Pharmaceutical Index
    ^GDAXI 6,950.53 -1 -1 DAX German Index Daily
    ^GSPC 1,359.88 -1 -1 S&P 500 Index
    ^HUI 440.848 -1 -1 Gold Stock Index Daily
    ^KS11 1,860.83 -1 -1 Kospi South Korean Index
    ^NDX 2,534.16 -1 0 Nasdaq Index Daily
    ^OEX 619.03 -1 -1 S&P 100 Index
    ^SSEC 2,014.73 -1 -1 Shanghai Composite
    ^TNX 1.574 -1 -1 10-Year CBOE Interest Rate
    ^XAU 165.67 -1 -1 Philadelphia Gold and Silver Index Daily
    ^XCI 1,022.17 -1 -1 Amex Computer Index Daily
    ^XOI 1,172.19 -1 -1 Oil Stock Index
    ABX 33.72 -1 0 American Barricks Gold
    AMSC 2.6 -1 -1 American Superconductor
    ANV 32 -1 0 Allied Nevada Gold Corp
    ANZ.AX 23.66 -1 -1 Australia/New Zealand Banking
    AVL 1.23 -1 -1 Avalon Rare Metals
    BBL 60.31 -1 -1 BHP Billiton
    BCRX 1.26 -1 -1 BioCryst Pharmaceuticals
    BIDU 92.68 -1 0 Baidu
    BK 23.64 -1 0 Bank of NY Mellon
    BP 40.03 -1 -1 British Petroleum Daily
    BWLD 71.39 -1 0 Buffalo Wings
    BZF 18.47 -1 -1 Brazilian Real long currency
    CDE 22.83 -1 0 Coeur D'Alene Daily
    CMP 74.77 -1 -1 Compass Minerals
    CVV 8 -1 -1 CVD Equipment
    DRYS 1.7 -1 -1 Dry Ships Daily
    EPI 17.75 -1 -1 India ETF
    EQR 54.31 -1 -1 Equity Residential
    EWC 27.1 -1 -1 Canada ETF
    EWG 21.7 -1 -1 Germany ETF
    EWZ 51.059 -1 -1 Brazil ETF
    FST 6.37 -1 0 FOREST OIL
    FXI 35.77 -1 -1 FTSE/XINHUA China 25 Index ETF
    GD 62.13 -1 -1 General Dynamics
    GDXJ 21.51 -1 0 Gold Junior Minors ETF Daily
    GE 20.15 -1 -1 General Electric Daily
    GG 39.67 -1 -1 Gold Corp
    GGB 8.44 -1 -1 GERDAU S.A.
    GLEN.L 321.55 -1 -1 Glencore International
    GRES 28.713 -1 -1 Global Resources
    GSK 41.98 -1 -1 Glaxo-Smith Klein
    HAP 34.11 -1 -1 Hard Asset Producers ETF
    HL 5.49 -1 0 Hecla Mining
    HME 57.75 -1 -1 Home Properties Inc
    HMY 7.73 -1 0 Homestake Mining
    HPQ 12.85 -1 -1 Hewlett Packard Daily
    IYW 67.27 -1 0 US Tech ETF
    JJG 54.891 -1 -1 Grains ETF
    JNJ 69.19 -1 0 Johnson and Johnson
    JOSB 44.78 -1 -1 JOS A. Bank Clothiers
    KOL 23.23 -1 -1 Coal ETF
    MCD 84.12 -1 -1 Mc Ddonalds Daily
    MRK 43.07 -1 0 Merk Pharmaceuticals Daily
    MSFT 26.521 -1 -1 Microsoft Daily
    MTL 5.84 -1 -1 Mechel Open Joint Stock Company
    NAB.AX 23.2 -1 -1 National Bank of Australia
    NEM 46.12 -1 -1 Newmont Mining Daily
    NFP 16.57 -1 -1 National Financial Partners Insur
    NFX 24.26 -1 -1 Newfield Explorations
    NILE 35.32 -1 0 Blue Nile
    NOC 63.57 -1 -1 Northrup Grumman *
    NVDA 11.38 -1 -1 Navidia Daily
    PBTH 4.44 -1 -1 PROLOR Biotech
    PCL 41.31 -1 -1 Plum Creek Timber
    POT 37.28 -1 -1 Potash
    PTP 42.54 -1 0 Platinum Underwriters Insur
    QLGC 8.8 -1 0 Q-Logic
    QQQ 62.3 -1 0 Powershares QQQ
    QRM 0.97 -1 -1 Quest Rare Metals
    RDS-A 65.03 -1 -1 Royal Dutch
    RGLD 80.95 -1 -1 Royal Gold Inc
    RVBD 16.48 -1 -1 Riverbed Technologies
    SCHN 27.22 -1 0 Schnitzer Steel Indust
    SHLD 47.49 -1 0 Sears Holdings
    SLGLF 0.002 -1 -1 Silverado Gold Daily
    SLW 36.12 -1 0 Silver Wheaton
    SLX 42.32 -1 0 Steel ETF
    SNDK 39.46 -1 -1 SanDisk Corp
    SPG 146.92 -1 0 Simon Property Group
    SPY 136.37 -1 -1 Spider S&P 500 ETF
    STJ 35.03 -1 -1 St. Jude Medical
    TAN 12.78 -1 -1 Global Solar Energy ETF
    TEVA 38.29 -1 -1 Teva Pharmaceutical Daily
    TNA 48.76 -1 -1 Direxion Daily Small Cap Bull
    TNK 2.42 -1 -1 Teekay Tankers Ltd.
    TYO 22.34 -1 -1 Short 10-Year TBond ETF
    UDOW 48.35 -1 -1 UP DOW ETF
    UPS 70.02 -1 0 United Parcel Service Daily
    VALE 17.11 -1 -1 VALE S.A.
    VNQ 62.44 -1 -1 REIT Index ETF
    VZ 41.4 -1 -1 Verizon Communications
    WMT 68.03 -1 -1 Walmart Daily
    XIDE 2.42 -1 -1 Exide Technologies
    XIN 2.99 -1 0 Xinyuan Real Estate China
    XME 40.89 -1 -1 Spider Mining Metals ETF

    One of the most 'horrible' pictures of this group of indexes is the SSEC, the Shanghai Index, China. This index was a darling of the DEBT BUBBLE rally, reaching a high of 6124 in 2007. It is trading now at 2014, a loss of 66%. And it is going lower.

    Note our M2F ALT Scatter Sum indicator showing buyer strenngth did not tick up at all during the 'rally" from September to November of this year.

    (click to enlarge)

    An even more devastating picture of the Shanghai Index is shown below, from 2007-2012. This shows how the Chinese, at least, feel about Chinese stocks. The Shanghai Index is open for trading for Chinese nationals only -- the Hong Kong (Hang Seng) Index can be traded by global investors.

    And we are told by the media and Wall Street 'cheerleaders' (they are not analysts any longer, they are cheering so that we will all send them our money and buy their financial products so they won't have to get a real job) that "China MIGHT avoid a hard landing..." (fingers crossed).

    Is the chart below not a very graphic picture of a HARD LANDING?

    And China is going to save the world from the current Global Collapse? They followed America and Bernanke's gospel. Look where it's leading them.

    This picture is very similar to Japan's Nikkei collapse after its housing bubble, when Japan lied about its cancer, and used taxpayer money to try to buy off the private debt collapse. Is the West heading in the same direction?

    SSEC, Shanghai Index: Post Housing Bubble 2007-2012.

    (click to enlarge)

    Nikkei Index, Japan -- Post Housing Bubble Stock Market: 1989: 2012.

    (click to enlarge)

    Hard to see how this is not the future of America and the West also.

    Protecting debt and pretending it isn't debt -- calling it revenues, savings, "it's different this time' assets -- is just a sophisticated lie.

    Does this mean we are in the first stages of the Post-Lie Housing Bubble Stock Market Collapse in America and Europe? That is not clear.

    Our doctor is lying to us, telling us we don't have cancer. He's telling us we have a cold, and we need to treat it with plenty of fluids. But we are already drowning in the Flood. We need dry land. Only dry land will save us. Noah send out the black bird at least. Where is Mount Ararat?

    Yes, of course, the world is upside down, turned inside out. The mountain top we are seeking we will find at the bottom of the ocean, 2019.

    Food for thought. Best wishes,

    Michael J. Clark

    CGTS, Hanoi, Vietnam

    18 November 2012

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