Economy improving?

[master53yoda]

Originally Posted by JR

Fair enough, just trying to be clear.

In any case, your prediction has fairly dire implications. It means that S&P 500 earnings would have fallen to half their current levels. Given the to-the-bone cutbacks those companies have already made, a level of 500 on that index would necesitate severed limbs. Ouch.

JR

Yes I agree, but the a full correction has historically been a 61.8% retraction . the market from the 80s until present has had a continuous influx of money from the work force which i think tended to inflate the market and the expectations of the economy. which caused a major extension of the 3 rd wave which ran from 85 to 2000 the extension was from 95 to 2000 and the top in 05 was where our retrace appears to be viewed from look at a 61.8% retrace of the 85 to 05 move it ends up in the 4 to 500 level. I've found the 61.8 % retrace to happen over and over again in the market. Retraces typicall happen in 3 waves called abc I think the a. wave ended in march and we are currently in the b. wave which will probably go up some from where it is currently at.

this could get real pretty deep so i'll stop here

[cgallery]

Originally Posted by master53yoda

Yes I agree, but the a full correction has historically been a 61.8% retraction...

Any concern that these prices will be supported by rapid increases in global money supplies?

[cgallery]

Originally Posted by master53yoda

I see another bounce coming in the next year or so and then a final drop to the 500 level in about 2013 to 15 and then the start of another true bull market.

Was just driving back from a support call and turned on the radio. The talk radio show host (a conservative) was talking about unemployment rates when he got a surprise call.

An economist from the UoC (University of Chicago). The Economist (can't remember name but they apparently vetted him after the call and he is legit) was talking about the 10.2 unemployment rate, and said the real number is about 11.5%, but that they are now cooking the books to make the #'s smaller. He said the REAL rate is now around 15% (I think, I'm trying to remember this) _and_ the gov't # will go to 13.2% next year, the actual # will be over 14%, and the REAL # will be in the 17's.

BTW, the distinction he was making was that if you compute the gov't # as they're supposed to, it would be about a point higher. So there is the gov't #, the actual # (the # the gov't should be arriving at), and then the actual # (where you add-in those that are underemployed or that have given up).

And then he dropped a bombshell. He agrees w/ you, Art except for one point: Timing. This UoC economist says the drop is coming early next year.

[master53yoda]

I have 2 counts running on the elliot waves the short count could start the dip next year and finish in 2011. that count would need this cycle to form a flat starting about now which is possible but doesn't bring this cycle high enough to meet Fibonacci's numbers.

[Charlie]

Deleted by me.

[master53yoda]

Originally Posted by Charlie

Isn't speculateing part of what got us in this mess ? Plus over extended credit, plus the bussiness owners that can't seem to understand that shareing the wealth is good for everyone, includeing themselves.

What I have tried to bring up is that the mess we are in is a Natural Market Cycle within the capitalistic world economy. the feds messing around etc. really doesn't have a lot of effect on the markets beyond the very short term (2 to 3 years). The fact that business has shared the wealth is obvious by the ability of the people to live at a level that far exceeds any level in the past.

The term Elliot wave count refers to the cycles of up and down that are measurable and mostly predictable in the market. Elliot waves are based on the "golden ratio" number that appears in all natural mathematical and organic functions. This Number is known as Fibonacci's number.

The biggest problem is that we just look at the short term and feel the pain of participating in the economy without sufficient personal protections, as in savings and insurance. If we operated basically debt free and with sufficient reserves these cycles would not effect us so much.

[Charlie]

Deleted by me.

[master53yoda]

Originally Posted by Charlie

Are massive job losses, an irresponsible stock market, corporate greed and corruption part of your so called Natural Market Cycle ?

The things you mentioned are there as part of the psychology of the people in the economy, but the greed of the consumer had as much to do with the late 90s spike as much as the other items, but they only effect things marginally.
For example you cannot see 9/11 in the monthly charts. the market did what it was going to do and 9/11's effect only lasted a couple weeks.

[woodturner]

Originally Posted by Charlie

Are massive job losses, an irresponsible stock market, corporate greed and coruption part of your so called Natural Market Cycle ?

What are "massive job losses"? To be sure, there are areas in the US that have experienced slightly higher job losses than typical - Detroit and Flint may be the worse, rate of job loss is up something like 3% - but it's due to the lack of competitiveness of the US auto makers, and the high premiums the unions demand. As a result, the overpaid autoworkers are not competitive on a global scale, so the companies are forced to outsource or cut production.

I'm not sure how you can have "responsible" gambling (e.g. the stock market)

There will always be some personal and corporate greed - personal greed and living beyond one's means is largely what got us into this mess. Haven't seen any evidence of higher levels of corporate greed than usual, though.

[woodturner]

Originally Posted by Charlie

Well I can tell you that the new home construction industry isn't any better here, and that at the end of the year we will loose close to 500 Union jobs at the Bobcat skidstear loader manufactureing plant.

The reason for the decline in new home construction is that new homes have been significantly overbuilt nationwide. If our population growth is x% and we build new homes at a rate of 10x, it's obvious that supply will eventually outstrip demand.

It's tough in the global economy to support the huge premium required by unions. There was a time in this country when the unions served a useful purpose, but too often in this global economy they are harmful to the worker. A company cannot stay in business paying their workers too much and having to sell their products at too high a price. Everyone likes high wages, but when the real value of a job is $y/hr and the union demands $2y/hr, that's not sustainable - especially when foreign workers will work for $0.5y/hr, enough difference to cover the shipping costs.

Everyone wants to make a high wage, but the market effectively sets a value on each worker's wage. If the worker is paid more than that amount, their job is in jeopardy, not matter the economic conditions. If the worker is paid market or less, their job is relatively secure and stable.