Michael Clark's  Instablog

Clark's Gate Timing System
Thursday 1 October 2009
 

 

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crises should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

 - Ludwig von Mises.

 

It's a new month, a month that has not been especially kind to investors.  Stocks are struggling; bulls and bears seem to be waging a ferocious battle.  You will notice that on Seeking Alpha a real tension is now being set up between bulls and bears -- bulls worried that the bears are now going to get onboard with the rally and recovery.  The second stage of death, after denial, is anger.  We may be leaving the denial stage, heading in to the anger stage.

Anger was on display today, with some Seeking Alpha writers accusing Paul Volcker of disloyalty because he spoke out again his boss's (Obama's) policies that are supposedly leading to a recovery.  Volcker had a long list of things he did not like, including banks using taxpayers' money in speculative markets in hopes of reviving balance sheets.  Some writers are calling for Volcker's crucifixion for disloyalty (ok, firing; crucifixion might be a bit much).  Many of us view Volcker as a kind of hero for saying what we all wanted SOMEONE to say.
 

We don't really want to be spending our grandchildren's money so that we can reinflate stock and housing markets that are too expansive already.  We don't want to live by the bubble creed any longer -- we cannot afford to live this debt-induced lifestyle pretending, in the process, that we won't have to pay this money back.  And indebted nation is a nation of slaves.  We don't want to be a nation of slaves.


INDEX VIEW

A few index pictures: The Dow Jones Transports are declining back toward support at 3561.23.  An orderly retreat so far.  The Nikkei has broken support and sees next support around 9250.  The Pharmaceutical Index (DRG) is battling to stay above its old high, but it is finding resistance.  Shanghai (SSEC) is trying to find a trading bottom at 2640 -- but trends are down, so this bottom may not hold.  And the VIX, the CRB Volatility Index (prime enemy of the stock markets), is struggling mightly to rise off the bottom and make an advance.

KEY: COLUMN 1: SYMBOL OF INDEX/ETF; COLUMN 2: M2F ALT = short-term momentum: above 70 = overbought; below 30 = oversold; COLUMN 3: 'TRADE" = current position using M4 Sum Plus Trade System.  COLUMN 4: "TREND" = short-term trend DIRECTION: above 0 is positive; below 0 is negative.  COLUMN 5: "M4 SP+" = issues with at least 2 consecutive days of positive M4 Sum Plus will register a 1.  COLUMN 6: 'M4 SP -" = issues with at least 2 consecutive days of negative M4 Sum Plus will register a 1.   COLUMN 7: "INT MOM" = M5 Average Sum Plus, which is an intermediate-term momentum indicator: 1 is positive; -1 is negative.  COLUMN 8: "LTERM MOM" = MA 40 Sum Plus, which is a long-term momentum indicator: +1 is positive; -1 is negative.  COLUMN 9: Name of Index.
 

CURRENCY VIEW

A couple new short-term trades today: long Euro vs. Chinese Yuan; Short US Dollar vs. Euro.

KEY: COLUMN 1: Currency Pair Symbol; COLUMN 2: Closing Price; COLUMN 3: New Short-Term Trade; COLUMN 4: Current Short-Term Position; COLUMN 5: New Long-Term Trade; COLUMN 6: Current Long-Term Positon; COLUMN 6: Currency Pair Name

We're still getting more long trades.  We show a few we like: timber long, (CUT); long French ETF (EWQ), long Natural Gas ETF (GAZ), long Semiconductor Index (SOXX), long Euro vs Dollar ETF (FXE). We closed three winning trades: nothing to brag about.  We really need a heady selloff, so that stocks can get a little room to move again.  We are stuck in a stagnant pattern now.  This rally has just about used up all of its oxygen.

home.mindspring.com/~mclark7/CGTS09.htm

A draft of the book Turn Out the Lights can be found at the website below.  This book is a description of the metaphysical causes of the economic cycles of expansion (Day) and contraction (Night).

www.hoalantrangallery.com/Turnoutlights.htm

Michael J. Clark's Gate Timing System
Hanoi, Vietnam

84 4 221 92210