Wed July 27, 2011
CNBC -Becky Quick Interviews The Market Perspective on Squawk Box
Becky - In an effort to bring you some balanced reporting, as opposed to the usual shills for the mutual fund industry that we regularly feature here, today we will visit with The Market Perspective TMP. TMP seems to have a rather outlandish view of what is clearly a stock market in full bull mode, can you explain that to our viewers?
TMP - Actually our conclusions are based on a the straightforward technical model pioneered by Wells Wilder back in the late 1970s. His Parabolic Stop and Reverse Indicator is flashing an important monthly sell signal across numerous markets.
Becky - Laughing and rolling her eyes, Now let's see you are located where, San Antonio? Uh, could you give us some examples?
TMP Sure the following markets are all now under monthly sell signals
GDX the Market Vector Gold Miners, a bellweather for gold stocks as well as others like the XAU and ASA
West Texas Intermediate Crude Oil
Silver Standard SSRI
Becky - Well crude and mining shares are volatile.
TMP - Yes but breakdowns in those markets preceeded the breakdown in stocks in 2008.
Other concerns are that most of the stock indices are exhibiting big W formation distribution patterns. Notably these are also characterized by lower volume. This tells us that there is less stock for sale and fewer buyers on each move up.
SPX Daily
GDX Market Vectors Daily
Becky - Hmm, perhaps you have overlooked the debt ceiling crisis and the weakening dollar as well as the stellar performance of numerous high techs?
TMP - Yes and it is the high techs that are holding the NASD, QQQ, and such up. While the Dollar is weak we should be close to some sort of maximum inflection worry point. Just this morning Business Insider depicted the Dollar as blue sinkhole in the ocean, yet it is still trading above some recent lows. The fact is that gold is way up by itself and the dollar way down with other asset classes off their highs, like silver.
Becky - So what is your take on the debt crisis?
TMP - It occurs to us that the USA is beginning to look more like a European country with multiple political parties unable to come to any consensus. The Tea Party is having an impact for the first time, that coupled with the gerrymandered districts for Republicans and Democrats means that they there is no voter constituency for any one office holder that can force a change in a position, hence, no agreements.
Becky - And so your conclusion is...
TMP - We are probably at some sort of inflection point where it seems that the Dollar will fall forever and high tech will soar. When everyone thinks that it is usually not what happens. This was the case for dot.coms in 2000, oil in 1981 at its high and oil in 1986 at its low, but all those trends ended when no one thought they would.
Becky - Don't worry viewers, we'll be back to which stocks to buy in our usual, cheery perma bull mode tomorrow!
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