Dow Stock Market Index Interim Trend Analysis and Forecast Update

NW,

Given you expect a significant correction of possibly 10% in stocks, what impact do you see this having on the dollar index? My assumption is the dollar index would spike on safe haven buying, but this is not in line with your expectations for dollar index to fall to 69-70 by mid year.

Appreciate your thoughts.

MB

Hi Nadeem -

Appreciate you taking the time to provide this update despite all the other analysis you are trying to complete. Let's see how the market plays out!

One trading logistical question:

Are you comfortable taking profits and sitting on cash, keeping in mind that cash has limited protection.

Not sure how it works in the UK, but cash held in US brokerage accounts are not FDIC insured. One runs brokerage firm counterparty risk with cash not directly parked in some sort of security. Do you know of "almost guaranteed" liquidity ETFs that would eliminate this counterparty risk?

cheers,

Eric

Your technical analysis is impeccable.

The SPX seems to be repeating the pattern it made during the late 60's to 1980. Do you see the resemblance?

http://i51.tinypic.com/66i8ee.jpg

[IMG]http://i51.tinypic.com/66i8ee.jpg[/IMG]

Hi

That would be the consensus view on the USD, my expectations are for a volatile downtrend, I am more interested in the destination than how we get there.

Best

NW

So far only lost money deposited in a brokerage account once in 1989. Leverage ensures that in a worst case scenerio the actual amount at risk across several accounts is less than 5% of liquid.

Its ALL a case of managing risk, stick to the bigger more well known firms rather than the small ones.

NW

Hi JVC

One indicator or chart is not enough, the sum of my analysis continues to conclude towards a multi-year bull market.

Best

NW

Nadeem,

please could you do an update for this article:

http://www.marketoracle.co.uk/Article2815.html

It would be great to see where the oppurtunities lie now,

Thanks

:-)

Hi, is your view on Yen changed since the last currencies update? How likely is 115? It seems that Yen is consolidating for a move, tricky to see where the next target is, as BOJ will try to prevent it trading below 80 vs USD, are they just threats or do they have the power to stop Yen appreciating?

Hi

Analysis of yen was as a component of that for the USD.

I don't trade the Yen, so can't comment what it could do next. Just that I expect the USD Index to weaken into Mid 2011 target of 69-70.

Best

NW

Ni Nadeem. Thank you as always!

You have mentioned uranium before. What specifically would you recommend to express this?

Also, are there any other off-the-radar areas you would recommend inquiring into?

Thanks!

Hi

I prefer to invest in sector leaders rather than small caps, far lower risk and time commitment.

Cameco is the primary one where uranium is concerned.

Best

NW.

Hello Nadeem,

What do you think of the current situation on the DOW?

Are the recent falls simply due to the panic over Egypt,or is this the beginning of the 10% correction?

I would be most interested in your view.

All best wishes,

Diane :)

Nadeem,

Where is the correction? Are you still anticipating one?

At what level will your view that the Dow is to enter a 15% correction at 12,000 be negated? Is this still to happen in the near-term?

Hi

I'm flat as of Dow 12k, my immediate focus is on coming to a conclusion on UK interest rates, I'll come back to the Dow for a trend for 2011 in about a weeks time.

My last quick update was for Dow 12k to target first 11,500, which is clearly not happening.

Best

NW

I'd say the corrections just started so to a couple of hundred points NW was close enough.

Where I think he will miss is the USD to .74 (was it?). Any meaningful correction here will see the USD rise targetting .82. Yields on treasuries and gilts will fall stopping out the extremo inflationardos. Investment grade bonds will take a rise and higher yields will fall alongside equities. AUDS/USD shold drop with 2 targets at .95 and .90. Oil and gold will both drop along witha steepening sell in Asian/Emerging markets for equities and bonds. In short risk off until we get rid of the overbought in all these markets.

The problem with getting super bullish on equities is it ignores the very relevant problem of what that implies for the bond markets. At these debt levels it takes a relatively tame rise in yields to create liquidation hence why it is much more likely to be choppy seas as we seesaw between them.

Nadeem,

Do you reckon that shale gas could be a bigger oppurtunity compared to uranium?

P.S. :Eagerly awaiting your ebook on successful trading. Is it still on target for spring 2011 release?

Hi

Ebook March / April is achievable. That and the housing market are my key priorities for analysis for 2011, unlike inflation, stocks and commodities for 2009-2010.

Best

NW

That's good news.

I'm a cynical old devil having witnessed firshand how sellside participants consistently load their analysis with their vested interests. Yours ,I am pleased to say is about has free from intrinsic bias as any I have seen. I don't always agree with every facet of your analysis,but more importantly it does make me think about my own outlook withinthe context of your analysis and for that I thank you for your efforts.

I concur with SC, you have proved to be one of the most accurate forecasters for as long as I can remember and I eagerly await your ebook.

I would also be more than happy to subscribe to paid service for more regular updates on the markets.

Thanks for helping me increase my wealth.

D.

Point of interest for you givent he outlook for future bullish behaviour. Looking at where serious inflations kicked off globally and where current monetary policy is at this time globally...where would you say we are in terms of the cycle of the last bull market 2003 to 2007 ? Looking at it the risk gains appear much further along than the chronological timeline for monetary tightening. By that I mean tightening was kicking in by 2005 ,but this level of risk gain looks much more like 2006.Either way though it's notable that the first half yearly (negative/consolidating) bias kicked in in both years albeit in different months of the first half.

I know like me you don't particularly care to look back and make 'yesterday' become a platform for current price action ,but nonetheless there cyclical patterns and I don't tend to ignore these.

Do you have a view on how this fits with prior fiscal and monetary policy and it's relationship with risk taking.?

I recall looking at this some months ago, and concluded that rising interest rates are not necessarily be bearish for stocks.

Any indicator on its own is just a coin flip.

Risk wise, over the past 3months, I have converted approx 18% of my stocks and commodities portfolio into cash.

My current focus is UK interest rates then housing, as I need to conclude whether this is the best time to buy a property or not.

The amount of work I've set myself to achieve this conclusion is pretty daunting.

Best

NW

15 Mar 2009 - Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470

Your articles are exceptionally helpful so thank you. I have never been a successful trader as I fell in the trap of wanting to get rich quick. I took a year out to clear my head and work in a different industry. What with my recent inspiration from your work and of course a grounded respect and understanding of taming ones psyche; I am ready to get back. The only problem is that I feel I know a little about a lot – and it’s all a big mess in my head!

Would you mind giving me 5 bullet points on the key facts I need to study to be a successful trader? S&P and EURUSD are the two products I’m looking at. I want to build a daily habit/routine but I do not know what that tick-off list looks like. The myriad of “Trade from home” books are useless.

Even if you recommend an amazon link then I’ll do that 

Probably a daring ask, but thought I would try my luck.

RM

Bullet points ?

1. Trading is tough, if your not fully focused you will lose money. It is not for everyone which is why over 90% lose.

2. Focus on ONE market only.

3. Trading Book ? Only one that sticks in my mind is "How to Make Profits in Commodities" by WD Gann, - It if you get it, don't read it, study it. Also don' take this as an endorsement for ganaphilia, for Gann was a great trader but an even greater salesman for mostly what did not work. But this book does work.

4. Be skeptical of everything, every tool,theory and commentary including your own analysis - Don't get emtioanlly attached, key is. is it making you money ? If not your wrong.

5. Don't discuss your positions with anyone else, EVER ! Else you will now have to contend with outside interference in your processes.

6............ my next free ebook

Best

NW.