October 30, 2011
Weekly Market Outlook
By Keith Schneider
by Keith Schneider
Thanks to the only world economy holding serious surplus cash (mostly US dollars), the US stock market is about to put in one of its best months ever, up almost 20% depending on where we close on Monday. Think what you want, but what sealed the Euro-zone deal perception wise for the markets, was that the Chinese opened the doors to their bountiful treasury as Western Europe went trick or treating. The Chinese Government, of course are not altruists; but, not wanting the Global economy to fail, they offered a small percentage of surplus dollars that they have accumulated from the US consumer to aid overleveraged western banks and countries. Talk about being in a global economy!
I guess the powers that be can always find a trillion here or there to keep the world spinning. The irony was not lost for this trader. The country with the biggest GDP growth, surplus cash, and trade balances etc., is being run by Communists Lite. The message to leaders of certain political parties here in the US is that central government planning might not be all bad. Good planning is good and bad planning is not. A centralized plan has certainly put China in a place that Capitalists want to be, holding the cash, not begging for it! However, hold on and don’t celebrate yet as we are certainly at a potential inflection point. The 5 biggest US Stock monthly market rallies (exceeding 20%) occurred in the 1930’s, and according to those looking at WD GANN cycles, we are out of time for this rally that started in March of 2009. We are also at key inflection points and the market is not stable at these levels. For any investor/trader this is not a time for complacency. This week’s video looks at key charts and points that will indicate the most likely market direction.
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