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Jim Rogers is one of the more successful investors in recent years having predicted $1000 gold and $100 oil. It’s hard to know what to do when things get like they are today but Jim offers his insights which make sense to me. I hope they may prove useful to you.
As I mentioned previously, Robert McHugh has been quite good at predicting what lies ahead and in his current newsletter, he explores the case for hyperinflation and its consequences, a lower dollar and higher commodity and precious metal prices. This is the big picture-a Wall Street rescue at the expense of everyone else.
Does this group look confident or worried?
The Paulson Manifesto Will Fail Because it Fails American Households
By Robert McHugh, Ph.D.
September 21st, 2008
As a trader, I stopped getting disgusted at government manipulation of markets several years ago, didn’t pretend it wasn’t happening, just tried to find when it was coming. I decided to develop an indicator that would tell me when the probability was extremely high that the Master Planners would intervene. That approach has served us well, and that indicator is known as the Plunge Protection Team (PPT) Indicator. It flashed a new “buy” signal Monday, September 15th at the close, rising above positive + 20.00, warning that the decline from August 11th was terminal. The Industrials have risen 565 points since that buy signal. When this measure rises above positive + 20.00, it is usually early, but very right, an early warning indicator telling us to enjoy the decline for a few more trading days but get ready for a spike rally.
The current government market intervention (“manipulation” is probably a more appropriate word) that transpired the past two weeks, reaching crescendo Thursday on a rumor, and Friday on an announcement, is one of the most dramatic since the 1930′s. It really puts into question the notion of U.S. markets being under capitalism, not socialism. The government nationalized Fannie Mae and Freddie Mac last week, announced its intent to nationalize AIG, a component of the Dow 30, this week, and then pulled out all the stops with the Paulson manifesto Friday. Not sure why he didn’t nationalize Lehman Bros, unless it was personal, as he came from competitor Goldman Sachs, and enjoyed watching them declare bankruptcy. Okay, maybe I am a bit cynical – maybe.
Before getting into market performance and the forecast, let’s cover what we know about this historic redefining of the rules of the game that Paulson has placed on the table for Congress to consider next week: Continue Reading »
Because we have entered uncharted financial waters, I want to share another voice of a man I respect for his analysis provided at reasonable rates, Robert McHugh.
His forecast unfortunately confirms my sense that we are in deep trouble that is likely to get much worse. My intuition based on my 20 year stint on Wall Street and historic perspective is to own gold as a hedge vs the sad hyper-inflating dollar, pay off all debt if possible, and consider moving to a low cost of living country like Ecuador where I am writing this.
“A Decline is Coming that Will Make This Week Look Gentle”
We believe there is a stock market decline coming in 2008 that will make this week’s drop look gentle. Stick with us through this mess. We base this conclusion on chart patterns, several with downside targets that are worrisome.
You can grab a subscription at www.technicalindicatorindex.com to get our daily market emails, and access our nightly and weekend market reports, with charts, indicator signals, and expanded commentary. We currently feature a 5 months for $99 special. Give yourself the investing advantage.
Last Friday, September 12th, we wrote to our subscribers, “A sharp decline will be the market’s fate dead ahead. Everything is pointing toward a crash at any time.” So far this week, the Industrials have lost 800 points in three days, and we closed at a new low for the year Wednesday.
The Master Planners bought the largest insurance company in America Wednesday, so we now have a major component of the Dow Industrials owned by the state, comrades. What we are witnessing is the nationalization of the financial industry by the United States government. Last week they nationalized Fannie Mae and Freddie Mac. The capitalistic stock market is scared to death of what is coming next, of socialism, of political change that could be different than anything we have seen since the founding of our nation. It is about confidence as much as anything else and that is gone. The PPT has been buying the tar out of the stock market all week. Lord knows how many shares are sitting in the Master Planner’s vault. When the government buys, that creates hyperinflation and Gold and the HUI have gotten that drift, rising sharply.
The stock market crash continued Wednesday, the Dow Industrials plunging 449.36 points Wednesday, closing at 10,609.66. It was the large price move that Tuesday’s small change in the McClellan Oscillator was suggesting would come. NYSE volume was huge at 132 percent of its 10 day average, again over 9.4 billion shares traded. Wednesday was another 90 percent down, selling panic day.
Metals rallied the most ever for one day on Wednesday. We have been calling for this sharp rally.
The NASDAQ 100 crashed 91.63 points Wednesday, closing at 1,632.45. The Russell 2000 crashed 34.27 points Wednesday, closing at 676.38. The HUI Amex Gold Bugs Index leaped 32.97 points, closing up sharply at 314.33 Wednesday. October Gold flew higher to 867.6, a 90 point one-day rally!!, the largest one-day rally ever. Silver rose to 11.63, while Oil rose to 97.15. The Dollar fell 0.97 to 78.19. Bonds fell 7 ticks to 121^22. The VIX rose sharply, up 5.92 to 36.22.
