Saturday, February 5, 2011

Changes Coming?

The front page of this morning's IBD confirmed what I was saying about the unemployment rate with a chart showing labor force participation at a 20 year low of 64.2%.  The 35.8% of people not participating in the workforce are either depending on family and friends for support, using up their life savings, are being supported by the government, or all of the above.  This is not sustainable.

Parket Binion has a presentation on a 14 week cycle in market tops at Terry Laundry's T Theory site -

For those interested in the astrological viewpoint, there is a view that we are in a time band for a market top that could lead to a correction of 10% or more.  See Raymond Merriman's work at

My own calculations show a potential for a market top around February 11.  However, I haven't nailed a turn in a while so I am not banking on it.

The problem as I see it at the present time is that most trend following strategies are long, but in my opinion market risk is extremely high, so there is just nothing to be done except wait for potential short setups or new long signals after a correction.  I do think there are opportunities in the precious metals and mining stocks on the short side, but at the moment there are not new entry setups, although there could be in the very near future.

We still have a long way to go in 2011.  This should be an exciting year to be in the markets.

No comments: