Monthly Archives: June 2008

Once Again…the Rest is up to Mr. Market

Back in 2005, 2006, and 2007 there was a compelling reason for me to try to guess at fundamental problems that might unfold in the coming months and years because my model was ultra-bearish housing, mortgage brokers, banks, and broker/dealers at a time when a lot of other analysts remained bullish (for any number of fundamental reasons.)  But now, with multiple disasters unfolding around us and some statistics at bearish levels last seen during the 1929-1932 period, it’s pretty obvious that the fundamental backdrop stinks.  For that reason, I’m going to skip any commentary other than to reiterate some of what I’ve been writing about in multiple emails over the past several weeks. 

The BAM stock model, especially the TRANS model, has NEVER been more bearish and the number of pre-crash signals already triggered in combination with the number of crash signals waiting to be triggered tells me that this debacle is pretty much set in stone.  The sell signals are just too relentless for them to survive this without a major crash or a series of mini-crashes—so I guess they’ll have to just choose their medicine. 

The usual charts are attached below and the most notable feature of this week’s forecast is that it looks to me like the USD has a sharp upside bias during June.  This seems odd given the fact that crude has one more blow-off window into 6-18ish but if the markets are going to crash a flight to the USD would follow the 1987 pattern.  (I pointed that out in a special report about a year back when I showed you all that the dollar was actually rallying as the stock market crashed during the final two days of that event.) 

-Stocks down and probably crashing, Bonds down sharply, Gold down slightly, USD up sharply, with Crude showing a down, up, down set up—128-130 followed by probable new highs above 140, followed by a sharp down.

Full report coming soon