PlatoStudyGroup

Dollar Strength and the Dow Bull:
Looking at the Dow’s Performance in All Currencies

Marty’s PowerPoints (II at p.22/55) show the sharp rise in the Dow since the last bottom in 2009: it’s a sharp angle in an unbroken bull channel.

However, Marty looks at performance in all currencies.  In fact Marty does not consider a market to be a true bull market unless it is rising in all currencies.  (Gold, for example, is not now rising in all currencies, e.g., not in the US dollar as respects the current temporary correction).

To illustrate this for the Dow, Marty displays the performance of the Dow in the following foreign currencies, together with an IMM chart separately showing the performance of each foreign currency:

Page      Currency         IMM Chart Trend
      
23      Australian Dollar  Down
24      British Pound       Down
25      Canadian Dollar   Down
26      Euros                  Down   
27      Japanese Yen     Down
28      Swiss Franc        Down

In the case of each currency, the performance of the Dow is noticeably more bullish than it is for US citizens investing with their dollars.

This is because of currency.  Australian, British, Canadian, European, Japanese and Swiss investors in the Dow are benefitting from

         1)   The rise in the Dow; plus
         2)   The rise in the dollar relative to the investors’ currency.

This is the same dynamic that led to the Nikkei bull from 87-89:  it attracted capital from around the world because both the value of the Japanese assets and the value of the yen they were denominated in were rising, giving foreign investors a double return on investment and a double pay out upon cashing in.

This is a brilliant and unforgettable example of how worldwide capital flows and currency exchange can align to create a strong bull market.  It is this type of explanation that can furnish the confidence to trade the Dow knowing that these trends are in place and are likely to remain in place for some time.

KingDavid has created a new Board below and has posted the first in a series of posts discussing the 2017 Hong Kong WEC Slides and Powerpoints distributed to atttendees by email on June 20, 2017.

Many of the illustrations are "new" in that I do not believe they were displayed at the Conference.  KINGDAVID

Marty has posted a market update in on the 2017 Hong Kong WEC forum that a correction in the Dow may be delayed until the Fall (at the time of the conference Marty stated that this month (June 17) could possibly be the timing of the false move downward).  -- KingDavid



06/16/17 Market Update
« on: June 16, 2017, 03:48:00 pm »
Quote

Market Update

The US share market has continued to move higher but the risk of a correction has been pushed off to the more traditional Sept/Oct time period. August is still a Panic Cycle and a Directional Change in the Dow. The target weeks for turning points are 06/26 and 07/10. We could see June produce the highest monthly closing. We do see Panic Cycles starting to form the last week of August.

It still appears to be a potential bear-trap shaping up for 2018. However, any low appears to be likely to form during the 2nd quarter of 2018. The Phase Transition will still be in play. However, we have to exceed the 23,000 level on the Dow for that to come into play. It looks like we can first test that major area, fall back, and the swing through in a sling-shot fashion into the latter years beyond 2018

These are the Trends to Monitor -- the expected upcoming events that are all connected that will give rise to the rise in the Dow and gold and other developments that Marty is forecasting.  Please add your comments, especially with regards to what the group can monitor to track and confirm that these trends are in motion as predicted.

WEC Trends to Monitor

Loss of Confidence in Government

Political populism
Civil unrest and war
Separatist movements
Pension crisis
EU non-reform, centralized bureaucracy and socialism
Bank Bail ins; capital controls
Listen and hear people expressing lack of confidence in govt

Rise in Global Taxation

G-20 coordination and information exchange
FATCA, asset forfeitures
IMF proposal for 10% confiscation of cash accounts
War on cash: cancel large bills (India); proposals to eliminate Euro 500 USA $100 
Government push/propaganda towards e- money (“Cash is for criminals”)

Decline in Banks

Emerging markets on periphery will go down first
EU banks will fail next (hold bad government debt)
Core banks will be hit last (Germany/US))

Decline of Non-US Economies

EU fails to reform (Macron, Merkl complacency)
Catalonia separatist movement; possible Grexit
Out of control Brussels bureaucracy
China continues to weaken into 2020

Sovereign Debt Crises and Sovereign Bonds in Decline

Flight from public (bonds) to private (stocks) assets
Bonds have already peaked
Watch for day there is no “bid” for govt bonds.
ECB has stated that it will stop buying bonds: who will?
Local governments, then state/province governments, countries’ debt will fail
Periphery debt will go first (emerging economies in US dollar denominated debt)

Interest Rates Rise

As stocks rise, Fed will be pressured by democrats to raise rates on the ground that “only the rich are benefitting.” 
Will blow up debt of overextended emerging market sovereign debt
   Accelerating and intensifying the crisis

US Company Stock Buybacks

This will contribute to a shortage of stocks as demand increases
Near the end: more stocks issued; then bonds

Capital Flows

Capital Flows will be into to the US

Bearish Sentiment on US Equities Until Dow  23000

“The Most Hated Bull Market in History”/“The Majority Must Always Be Wrong”
Incorrect majority remains bearish for Dow bull market, (“Dow will crash”) provides energy for the Dow bull. 

Dow Sideways or False Move Down (Bear Trap)

Anti-Trump sentiment/efforts to delegitimize, remove could cause temporary dip
May be a sharp false move down to set up a good “sling shot”

US Equity Markets to Rise

Stock market will be the #1 hedge against government
Capital flows from around the world will concentrate in the Dow
Similar to 1927-29 “Greatest Bull Market in History”:
Capital will flee govt bonds into private assets
Lots of $$ on the table but no way big money is staying in government debt
Need only 10-15% of 20T in govt debt to move to stocks to blow top off of Dow
Dow as a place to park and preserve capital: fundamentals won’t matter

First Dow; then S&P; then Nasdaq
Retail investors will reenter US Equities market; participation to 2007 levels

US Equities Phase Transition and Meltdown

Dow 23000-34000-40000+
When Dow begins to lag Nasdaq, watch for the top in equities
When majority incorrectly believes Dow going to 100,000 it will blow up

Dollar Rises

Safe haven in troubled world
Reserve currency with no competition thanks to flawed Euro design
Higher interest rates will add fuel to fire
Euro going to par with dollar: lights out – confidence gone never to return
GBP to continue to decline as long as remains below 135

Dollar Pegs Break

Hong Kong; Yuan; Middle Eastern pegs will snap

Precious Metals Rise

True Bull Market: gold rises in ALL currencies
Gold may dip briefly to 875 due to rise in dollar -- slingshot
Will reflect loss of confidence in government

Tangible Assets Rise, E.g., Commodities

Part of 51.6 year swing in place from public to private confidence
   
Worldwide Monetary Crisis and New Reserve Currency

US will insist when dollar gets too strong and taking down US economy
Wildcard: weather the storm with tangible assets?

Dear All,

I think that everyone should be subscribing to the Investor version of Socrates ($7.50/month) pending the availability of the professional version.

You can familiarize yourself with the trends and price action in 25 key markets which relate to the subject of the 2017 WEC, together with key reversals.

In addition, you can familiarize yourself with the Socrates computer-generated analyses which in the future will furnish part of the information you will be submitting weekly on your assigned market(s).  These show how Marty analyzes markets (fractally in the context of the overall trend on the annual level and most recent important trends on the lower levels) and how it uses previous month ranges to gauge immediate trends.